                            UNPUBLISHED

                  UNITED STATES COURT OF APPEALS
                      FOR THE FOURTH CIRCUIT


                            No. 12-1581


MINNESOTA LAWYERS MUTUAL INSURANCE COMPANY,

                Plaintiff - Appellee,

           v.

BAYLOR & JACKSON, PLLC; BRYNEE K. BAYLOR; DAWN R. JACKSON;
RICHARD THOMAS; HENRY THOMAS; FREEDOM NY INC.; TEKNIC CORP.;
T.F.T.F. CAPITAL CORP.; HT FOOD PRODUCTS; RSG GROUP &
ASSOCIATES INC.,

                Defendants - Appellants.



Appeal from the United States District Court for the District of
Maryland, at Baltimore.      James K. Bredar, District Judge.
(1:10-cv-02701-JKB)


Argued:   March 19, 2013                   Decided:   June 27, 2013


Before DUNCAN, FLOYD, and THACKER, Circuit Judges.


Affirmed by unpublished opinion. Judge Floyd wrote the majority
opinion, in which Judge Duncan joined.    Judge Thacker wote a
dissenting opinion.


ARGUED: Joseph Michael Creed, JOSEPH, GREENWALD & LAAKE, PA,
Greenbelt, Maryland, for Appellants.    Paul Newman Farquharson,
SEMMES, BOWEN & SEMMES, Baltimore, Maryland, for Appellee.    ON
BRIEF: Cary J. Hansel, JOSEPH, GREENWALD & LAAKE, PA, Greenbelt,
Maryland, for Appellants. Gregory L. Arbogast, SEMMES, BOWEN &
SEMMES, Baltimore, Maryland, for Appellee.
Unpublished opinions are not binding precedent in this circuit.




                                2
FLOYD, Circuit Judge:

     Appellants       are       Baylor   &    Jackson,     PLLC,    a   law     firm     in

Washington, D.C., and its two principals, Brynee Baylor and Dawn

Jackson (collectively, Baylor & Jackson).                        In 2006, Baylor &

Jackson filed a response to a motion on behalf of its clients,

Henry   Thomas      (Thomas)      and    Richard    Thomas       (collectively,         the

Underlying     Defendants),          owners       and     operators       of     several

companies, averring that their adversary, William Robbins, was

not entitled to summary judgment in a certain Maryland state-

court case.      Baylor & Jackson failed to provide documentation,

as required by state procedural rules, to support its assertion

that genuine issues of material fact prevented judgment as a

matter of law, and the trial court ultimately granted judgment

to Robbins.

     In 2009, the Maryland Court of Appeals affirmed the trial

court’s     grant     of    summary          judgment,    reiterating          Baylor    &

Jackson’s    failure       to    properly      support    the    opposition      to     the

motion.      Afraid that the Underlying Defendants would sue for

malpractice,     Baylor     &     Jackson      notified    its    legal   malpractice

insurer,    Appellee       Minnesota      Lawyers       Mutual    Insurance      Company

(MLM) of the possibility of a claim.                      Shortly thereafter, the

Underlying Defendants filed the malpractice suit that Baylor &

Jackson had feared, and in turn, MLM provided coverage.                           Within

a year, however, MLM communicated to Baylor & Jackson that it

                                              3
would no longer defend or indemnify it in the action because it

allegedly     had    failed    to    provide       timely        notification        of    the

possibility of a claim.             Obviously, Baylor & Jackson disagreed

with MLM’s conclusion on this point, and the dispute we address

here was born.        Each party petitioned the district court for a

declaratory     judgment      in    its    favor,    and     on     cross-motions          for

summary judgment, the court ruled for MLM.                             For the reasons

outlined below, we affirm.



                                            I.

      Four    lawsuits      are     in    play     here:         (1)    the       Underlying

Defendants’ litigation with the federal government for breach of

contract,      (2)     Robbins’s          litigation        with       the        Underlying

Defendants     also    regarding,          among     other        things,         breach    of

contract, (3) the Underlying Defendants’ litigation with Baylor

&   Jackson    for   legal    malpractice,         and     (4)    Baylor      &    Jackson’s

litigation with MLM for disclaiming coverage in the Underlying

Defendants’ malpractice action.                  Below, we provide the relevant

facts from each suit.



                                            A.

      In     1999,    the     Underlying         Defendants        sued      the     federal

government for breach of contract, and although they ultimately



                                            4
prevailed, they did not do so without the financial assistance

of Robbins, at that time a friend of Thomas.

        Thomas and Robbins entered into several agreements related

to the funding of the litigation:               (1) On July 22, 1998, they

agreed that Thomas would repay Robbins $75,000 for every $25,000

he supplied as personal expense money, provided the litigation

was successful (3:1 Agreement); (2) on December 16, 1998, they

agreed that Robbins would finance the cost of the litigation;

(3) on November 11, 1999, they agreed that Robbins would pay the

legal      fees   associated   with     litigating     and/or     settling    the

government claims and that, for doing so, he would receive one-

sixth of the first $21 million obtained against the government

(Cooperation Agreement); (4) on May 1, 2001, Robbins agreed that

if Thomas provided an accounting that showed he had repaid all

of   the    out-of-pocket    expenses    that    Robbins    had   incurred,   he

would give Thomas a fifty-percent discount on Thomas’s repayment

of the attorneys’ fees (Private Legal Side Agreement); and (5)

on   May    20,   2002,   Thomas   promised     to   pay   Robbins   a   $600,000

consulting fee for his advice related to the litigation (May

2002 Contract).

      Between December 16, 1998, and February 20, 2004, the legal

fees associated with the litigation totaled almost $1 million.

In February 2004, Thomas’s accountant prepared a report showing

the amount that Thomas owed Robbins.                 The report erroneously

                                        5
deducted     nearly    $200,000      and     failed       to    include      the   $600,000

consulting fee.        Robbins objected to the figures and immediately

retained counsel.



                                            B.

        In   2005,     Robbins      sued        the     Underlying          Defendants     in

Baltimore City Circuit Court, alleging breach of the Cooperation

Agreement,        entitlement       to     declaratory           relief,       breach      of

fiduciary duty, breach of the 3:1 Agreement, and breach of the

May 2002 Contract.            Baylor & Jackson entered the case in 2006.

On July 27, 2006, Robbins moved for summary judgment on the

following claims: (1) breach of the Cooperation Agreement, (2)

breach of fiduciary duty, (3) breach of the 3:1 Agreement, and

(4) breach of the May 2002 Contract.                     The Underlying Defendants

filed    their     opposition       to    the    motion,        and    Robbins     replied.

Following a motions hearing, on August 22, 2006, the Baltimore

City    Circuit    Court      granted     summary       judgment       to    Robbins.      It

awarded      $1,844,913       for   breach       of    the     Cooperation      Agreement,

$199,995     for     breach    of   the    3:1        Agreement,      and    $600,000     for

breach of the May 2002 Contract.                      Regarding the fiduciary duty

breach,      it    granted      judgment        to     Robbins        but    awarded     only

attorneys’ fees for his pursuit of the claim.

       The import of Thomas’s litigation with Robbins lies in some

of the reasons that the circuit court granted summary judgment.

                                             6
Obviously, the court concluded that no genuine issue of material

fact precluded judgment as a matter of law.                But it was able to

arrive   at   that   conclusion   in   part      because    Baylor    &   Jackson

failed   to     adequately   support       the     Underlying        Defendants’

opposition to Robbins’s motion.

      For example, attempting to demonstrate that an issue of

material fact existed regarding the Cooperation Agreement, the

Underlying Defendants claimed the Agreement was invalid because

“it was not signed by the original designated Fund Manager.”

Robbins v. Thomas, No. 24-C-05-006855, slip op. at 6 (Balt. City

Cir. Ct. Aug. 22, 2006).            But the circuit court refused to

credit this assertion, stating, “Since Thomas submitted neither

an affidavit nor a sworn statement to support this contention,

this Court finds no basis upon which to accept his argument.”

Id.   Correspondence that MLM submitted to the district court in

the   present   action   provides   additional      details    regarding      the

state court’s response to Thomas’s unsubstantiated allegation:

      Baylor & Jackson filed a timely opposition to the
      motion for summary judgment which argued, at least in
      part, that summary judgment could not be granted as a
      matter of law because genuine disputes of material
      fact existed. In an attempt to present those material
      facts to the court, Baylor & Jackson attached an
      affidavit from Mr. Thomas. However, the affidavit was
      unexecuted and had been attached in that form in
      error. At the hearing on August 17, 2006, the
      Honorable Joseph H.H. Kaplan refused to either allow
      Mr. Thomas to execute the affidavit or testify to the
      contents of the affidavit despite Mr. Thomas’[s]
      presence at the hearing.

                                       7
Minn. Lawyers Mut. Ins. Co. v. Baylor & Jackson, PLLC, 852 F.

Supp.    2d    647,    651   n.2   (D.     Md.       2012)    (quoting       correspondence

between counsel for MLM and Baylor & Jackson).                                   And at the

conclusion of its discussion of the Cooperation Agreement, the

court       again    referred      to     the       lack     of    support      accompanying

Thomas’s opposition:            “Although Thomas disputes various items in

his     Response,       this      Court     cannot          accept       them    as       facts.

Documents,          affidavits,     and     sworn          testimony      in     the      record

contradict the assertions made in Thomas’s Response.”                                  Robbins,

No. 24-C-05-006855, slip op. at 8.

       On     appeal,     the     Court     of      Special       Appeals       of     Maryland

affirmed the circuit court’s grant of summary judgment in part

and reversed and remanded in part.                        Thomas v. Robbins, No. 944,

slip    op.     at      20-21     (Md.     Ct.       Spec.        App.    July       8,    2009)

(unreported).           Relevant        here,       the    court     observed        that    the

Underlying Defendants’ opposition to summary judgment “was not

supported      by     affidavits,        deposition          testimony,        interrogatory

answers, or any sworn evidence as required by Maryland Rule 2–

501,” id. at 7, and that such failure “was a proper ground upon

which the trial court could conclude that no dispute of material

fact existed,” id. at 11.                   Specifically addressing the trial

court’s grant of summary judgment as to Robbins’s claims for




                                                8
breach   of   fiduciary     duty,   breach       of   the    3:1   Agreement,     and

breach of the May 2002 Contract, the court stated:

     In granting summary judgment on Counts III [breach of
     fiduciary duty] and IV [breach of 3:1 Agreement] and
     the Consolidated Count [breach of May 2002 Contract],
     the trial court did not expressly restate its
     determination that appellants had failed to place
     disputed material facts before the court by way of
     sworn evidence. Normally, we “are confined to the
     basis relied upon by that court and may not otherwise
     explain its conclusion by introducing new legal
     theories.” It is evident, however, that appellants’
     failure to comply with Maryland Rule 2–501 severely
     undermined their opposition to summary judgment on all
     the   counts.  Consequently,   we  shall   conduct our
     analysis of whether appellee was entitled to judgment
     as a matter of law on the basis of the facts as
     alleged in appellee’s motion for summary judgment.

Id. at 11–12 (footnote omitted) (citation omitted).

     Ultimately, the court affirmed the trial court’s judgment,

with the exception of its award of attorneys’ fees on the breach

of fiduciary duty claim.            As to that matter, it reversed and

remanded the case for recalculation of the judgment.



                                      C.

     The third suit involved a legal malpractice action that the

Underlying     Defendants     instituted        in    2009    against    Baylor     &

Jackson for its failure to properly support the opposition to

summary judgment in the Robbins action.                     As noted above, MLM

initially covered Baylor & Jackson under the legal malpractice

insurance     policy   that   it    had       provided   them,     but   later,    it


                                          9
reversed course.     It was then that the fourth suit, and the one

we address here, commenced.

     The legal malpractice policy that MLM provided to Baylor &

Jackson promised the following:

     WE will pay all sums up to the limit of OUR liability,
     which the INSURED may be legally obligated to pay as
     DAMAGES due to any CLAIM:

     (1)    arising out of any act, error or omission of the
            INSURED or a person for whose acts the INSURED is
            legally responsible; and

     (2)    resulting from the rendering or failing to render
            PROFESSIONAL   SERVICES  while  engaged   in  the
            private practice of law or from rendering or
            failing to render PROFESSIONAL SERVICES as a PART
            TIME EMPLOYED ATTORNEY OF A GOVERNMENTAL BODY,
            SUBDIVISION OR AGENCY.

The policy also gave MLM “the exclusive right to investigate,

negotiate    and   defend   CLAIMS        seeking   DAMAGES   against   the

INSURED.”    MLM first contracted with Baylor & Jackson in 2003.

The policy had a term of one year, and Baylor & Jackson renewed

yearly until 2010.

     As noted above, the issue in this case is whether Baylor &

Jackson provided timely notification to MLM of the possibility

of a malpractice claim.     Baylor & Jackson first contacted MLM on

July 9, 2009, when it received the Court of Special Appeals’

opinion.     Thomas brought his malpractice claim on August 11,

2009.   MLM contends that Baylor & Jackson should have contacted

the insurance company in 2006, when the circuit court issued its


                                     10
opinion.          It was then, MLM maintains, that Baylor & Jackson

“first     became        aware      of     facts     which     could     have   reasonably

supported the claim asserted against it by Mr. Thomas.”

       Upon       notifying      Baylor        &     Jackson     that    MLM    would    not

represent it, MLM filed an action in the United States District

Court    for       the    District       of    Maryland,       seeking     a    declaratory

judgment      that       it   had    “no      contractual       obligation,      under   its

insurance policy, to defend and/or indemnify Baylor & Jackson,

Baylor, and/or Jackson . . . in the case of Thomas v. Baylor,

Case    No.       24-C-09-005000.”             Baylor    &     Jackson    counterclaimed,

seeking       a    declaratory       judgment         that   (1)   “Baylor      &   Jackson

provided timely notice to MLM of the possibility of a claim

against it,” (2) “MLM did not suffer any actual prejudice as a

result of Baylor & Jackson’s alleged delay in providing notice,”

(3) “MLM is estopped from denying coverage,” and (4) “MLM is

obligated to cover Baylor & Jackson’s settlement with the Thomas

Defendants in the amount of $850,000.”                         Both parties moved for

summary judgment.              Reasoning that Baylor & Jackson failed to

provide timely notice to MLM of the possibility a claim and that

MLM did not need to show actual prejudice, the district court

granted MLM’s motion and denied Baylor & Jackson’s motion.




                                                11
                                          II.

     “We review the grant of summary judgment de novo, asking

whether,       viewing   the    facts    in       the   light    most      favorable      to

[Baylor    &    Jackson],      there    is    no    genuine     dispute      as    to    any

material fact and [MLM] is entitled to judgment as a matter of

law.”      Lansdowne     on     the    Potomac      Homeowners       Ass’n,       Inc.    v.

OpenBand at Lansdowne, LLC., No. 12-1925, 2013 WL 1364274, *4

(4th Cir. Apr. 5, 2013).               Because we sit in diversity in this

case, we apply Maryland law.            See 28 U.S.C. § 1652.

     Baylor & Jackson assert that the district court erred in

determining that MLM had no obligation to provide it coverage

because (1) it timely reported the possibility of a claim to MLM

and (2) even if it did not, MLM failed to show that it suffered

actual prejudice as a result.



                                             A.

     The policy that MLM provided to Appellants includes the

following stipulations regarding notice of claims:

     A CLAIM is covered only if made during the POLICY
     PERIOD or extended reporting period and reported to
     US:

     (1)       during the POLICY PERIOD;

     (2)       within 60       days    after      the   end     of   the    POLICY
               PERIOD; or

     (3)       during the extended reporting period.


                                             12
The act, error or omission giving rise to the CLAIM
must have occurred:

(1)   during the POLICY PERIOD; or

(2)   prior to the POLICY PERIOD and on or after the
      PRIOR ACTS RETROACTIVE DATE, if the INSURED had
      no knowledge of facts which could reasonably
      support a claim at the effective date of this
      policy.

A CLAIM is deemed made when:

(1)   a demand is communicated to the            INSURED   for
      DAMAGES or PROFESSIONAL SERVICES;

(2)   a lawsuit is    served   upon    the   INSURED   seeking
      DAMAGES; or

(3)   an act, error or omission by any INSURED occurs
      which has not resulted in a demand for DAMAGES
      but which an INSURED knows or reasonably should
      know, would support such a demand.

We will not provide coverage for any CLAIM arising out
of the same, related or continuing PROFESSIONAL
SERVICES which resulted in a CLAIM prior to the first
policy issued to the INSURED by US.

. . . .

“CLAIM(S)” means:

(1)   A demand communicated to the INSURED for DAMAGES
      or PROFESSIONAL SERVICES;

(2)   A   lawsuit   served   upon     the    INSURED   seeking
      DAMAGES; or

(3)   An act, error or omission by any INSURED which
      has not resulted in a demand for DAMAGES but
      which an INSURED knows or reasonably should know,
      would support such a demand.

. . . .



                             13
     “POLICY PERIOD” means the period from the effective
     date of this policy to the expiration date or earlier
     termination date of this policy. POLICY PERIOD does
     not include any extended reporting period.



                                             B.

     First, Baylor & Jackson avers that it timely reported the

possibility      of   a    claim    to   MLM.        As    noted   above,       per    MLM’s

policy,    a    claim     is   deemed    made      when    at    least    one    of    three

circumstances occurs:

     (1)       a demand is communicated to the                      INSURED      for
               DAMAGES or PROFESSIONAL SERVICES;

     (2)       a lawsuit is         served    upon        the   INSURED    seeking
               DAMAGES; or

     (3)       an act, error or omission by any INSURED occurs
               which has not resulted in a demand for DAMAGES
               but which an INSURED knows or reasonably should
               know, would support such a demand.

And for a claim to qualify for coverage, it must have occurred

during the policy period or within a certain time prior to the

policy period, provided that the insured “had no knowledge of

facts which could reasonably support a claim” at the time the

policy took effect.

     Because      Baylor       &   Jackson    first       contracted      with   MLM    for

coverage in 2003 and then renewed its coverage each year until

2010, the operative question is whether via the Baltimore City

Circuit    Court’s        2006     opinion        granting      summary    judgment      to

Robbins, Baylor & Jackson “kn[ew] or reasonably should [have]

                                             14
know[n]” that it had committed “an act, error or omission” that

“would    support . . . a   demand”    for     damages.    If   the   opinion

provided such notice, Baylor & Jackson was obligated to report

the possibility of a claim to MLM in 2006.                If not, and its

first notice of a potential demand for damages came in 2009,

when the Court of Special Appeals affirmed the circuit court,

then the contact it made with MLM in 2009 was timely.

      In Maryland, an insured’s obligation to notify his insurer

of a potential claim “accrues when the [insured has knowledge

of]   circumstances . . .     [that]         would . . . suggest[]     to   a

reasonable person the possibility of a claim.”             Commercial Union

Ins. Co. v. Porter Hayden Co., 698 A.2d 1167, 1194 (Md. Ct.

Spec. App. 1997).      We believe that Baylor & Jackson had such

knowledge when the circuit court issued its decision on August

22, 2006.

      First,   the   specifics   of        opposing   motions   for   summary

judgment are outlined clearly in Maryland’s Rules.               Rule 2-501

states,

           A response to a written motion for summary
      judgment shall be in writing and shall (1) identify
      with particularity each material fact as to which it
      is contended that there is a genuine dispute and (2)
      as to each such fact, identify and attach the relevant
      portion of the specific document, discovery response,
      transcript of testimony (by page and line), or other
      statement under oath that demonstrates the dispute. A
      response asserting the existence of a material fact or
      controverting any fact contained in the record shall


                                      15
        be supported by an              affidavit        or       other    written
        statement under oath.

Md. R. Ct. 2-501(b).             Moreover, as to affidavits, the Rules

provide that they “shall be made upon personal knowledge, shall

set forth such facts as would be admissible in evidence, and

shall    show       affirmatively      that     the    affiant      is    competent   to

testify to the matters stated.”                 Id. 2-501(c).        We think it safe

to assume that any reasonable lawyer practicing in Maryland has

knowledge      of    these   rules.        In    fact,       we   cannot    countenance

otherwise.

       Assuming, then, that Baylor & Jackson was aware of these

rules, we can accurately term its attempt to oppose Robbins’s

motion with an unexecuted affidavit as rather lax.                          Indeed, it

should have registered no surprise when, at the motions hearing,

the circuit court refused to credit the affidavit, allow Baylor

& Jackson to execute it on the spot, or hear live testimony from

Thomas.       Of course, the events at the hearing foreshadowed the

court’s ultimate grant of summary judgment to Robbins, but they

also    highlight      the   role   that      Baylor     &    Jackson’s     failure   to

adequately represent Thomas played in the court’s decision.                           If

Baylor    &   Jackson     left   the    hearing       with    any    confusion   as   to

whether its representation was acceptable, the circuit court’s

opinion should have provided clarity.                        Indeed, we think that

upon receipt of the opinion, “a reasonable [lawyer],” especially


                                           16
one who had been present at the summary judgment motion hearing,

would     have       considered         “the       possibility         of     a     [malpractice]

claim.”       Commercial Union Ins. Co., 698 A.2d at 1194.                                 The 2009

opinion    from       the   Maryland          Court      of    Special      Appeals        may    have

further solidified this possibility, but it hardly provided the

first inkling that Baylor & Jackson had committed an omission

that would support a demand for damages.                           Thus, we conclude that

the district court properly held that Baylor & Jackson failed to

timely notify MLM of the possibility of a claim.

      Baylor & Jackson makes much of the fact that the circuit

court’s decision was based on “numerous alternative grounds,”

while the Court of Special Appeals decision “rested squarely on

the alleged lack of an affidavit.”                            It contends that “[b]ecause

the Circuit Court made it clear that . . . the Thomas Defendants

would    have     lost      the   case         irrespective           of    whether        Baylor    &

Jackson submitted an affidavit, there was no reason for the firm

to    expect      that      its       clients           would     bring       an     action        for

malpractice.”           But    as       the    district         court       aptly     recognized,

Baylor    &    Jackson      has     a    misplaced            focus.        The    issue     is    not

whether its failure provided the only reason for the circuit

court’s judgment, but rather whether it provided any reason for

the   judgment.          Obviously,           it    did.        And    because       it     did,    we

believe       that    Baylor      &     Jackson         had     adequate          notice    of     the



                                                   17
possibility       of     a    malpractice       claim      such       that    it    should     have

contacted MLM.



                                                C.

      Next, Baylor & Jackson avers that even if its notice was

untimely, MLM was still obligated to provide coverage because it

did   not       suffer       actual      prejudice      from      the    untimely         notice.

Baylor      &    Jackson         correctly       recognizes            that        Maryland     law

sometimes requires insurers to demonstrate actual prejudice:

           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.

Md.   Code      Ann.,        Ins.    § 19-110.         But       as    the    district        court

recognized, the circumstances under which insurers are required

to provide such demonstration depends on the language of the

policy at issue.              The district court concluded that section 19-

110   is    inapplicable            to   the   policy      MLM    provided          to   Baylor   &

Jackson, but we decline to reach the issue.                            Instead, we confine

our   decision      to       a   determination        of     whether         MLM    sufficiently

demonstrated actual prejudice.                       If it did, we may affirm the

district court’s judgment on that basis, without determining the

applicability of section 19-110 to MLM’s policy.

                                                18
     As    noted      above,      section 19-110            requires     that    an    insurer

establish actual prejudice by a preponderance of the evidence.

A preponderance of the evidence is “superior evidentiary weight

that, though not sufficient to free the mind wholly from all

reasonable       doubt,    is    still     sufficient         to    incline     a     fair   and

impartial mind to one side of the issue rather than the other.”

Black’s Law Dictionary 1301 (9th ed. 2009).                            We think that MLM

made such a showing.

     We note first that MLM’s 2006 policy states, “WE have the

exclusive       right     to    investigate,         negotiate       and    defend      CLAIMS

seeking        DAMAGES    against        the       INSURED    for     which     the     policy

provides coverage.”             Thus, MLM had not only agreed to “pay all

sums up to the limit of [its] liability, which the INSURED may

be legally obligated to pay,” it had also obligated itself to

“investigate, negotiate and defend” such claims.                                 Thus, when

Baylor    &     Jackson    failed,       upon       receiving      the   circuit       court’s

opinion,       to   notify     MLM   that      a    potential       claim   existed,         such

failure        hindered    MLM’s     ability          to     fulfill     its     contractual

duties.        By the time Baylor & Jackson contacted MLM, Maryland’s

Court     of    Special        Appeals    had       already     affirmed        the    circuit

court’s grant of summary judgment.                         At that point, MLM had few

options.        In its brief, MLM maintains that Baylor & Jackson’s

untimely notice was prejudicial because it “prevented [MLM] from

advising Baylor & Jackson to file a motion for reconsideration,

                                               19
assisting    Baylor     &    Jackson    in     crafting    arguments    for    that

motion, and/or assisting in the appeal.”                  We agree.    See Prince

George’s Cnty. v. Local Gov’t Ins. Trust, 879 A.2d 81, 97 (Md.

2005) (“The case for finding prejudice as a matter of law is

strongest    for     primary      insurers     who   receive   notice    after   a

judgment because the late notice deprives the primary insurers

of   their   right     to    control    the     investigation,      defense,   and

settlement of claims.”).            Contrary to the suggestion that MLM’s

proffer of what it could have done is “speculative” and lacking

in concreteness as to allegations of “actual harm,” ante, at 37,

we are unsure what additional proof of actual harm MLM could

offer.     By the time MLM received notice of a possible claim, the

harm     supporting    the       malpractice    judgment     was    irreversible.

Thus, in spite of the allegation that “MLM had the opportunity

to mitigate the potential malpractice claim before it was even

filed,”    id.,    such     an    opportunity     seems    purely     theoretical.

MLM’s real mitigation opportunity came and went during the time

that Baylor & Jackson knew about the possibility of a claim and

remained silent.       And because Baylor & Jackson remained silent,

MLM can speak only to how it could have helped.                     That MLM was

denied its true mitigation opportunity is proof enough of actual

harm.     We decline to levy a more stringent requirement under

these facts.Accordingly, we affirm the district court’s grant of

summary judgment to MLM.

                                         20
                               III.

       In sum, we affirm the district court’s grant of summary

judgment to MLM, holding that (1) Baylor & Jackson failed to

provide MLM with timely notice of a potential claim and (2) MLM

demonstrated   actual   prejudice    such   that   if   section 19-110

applies, MLM’s disclaimer of coverage comported with Maryland

law.

                                                              AFFIRMED




                                21
THACKER, Circuit Judge, dissenting:

              The    majority       concludes      that      even     if    Maryland    law

required the insurer, Minnesota Lawyers Mutual Insurance Company

(“MLM”), to demonstrate actual prejudice in order to disclaim

coverage of a malpractice claim untimely noticed by Baylor &

Jackson, MLM has done so such that it may properly disclaim

coverage.        With respect, I cannot join the majority opinion.

              In    my   view,     the    district      court   erroneously       applied

Maryland law in two crucial respects.                    First, the district court

incorrectly concluded that Maryland Code Ann., Insurance § 19-

110   did    not     apply    to    require      MLM    to   prove    it    was   actually

prejudiced by Baylor & Jackson’s untimely notice.                           This was the

central question addressed by the district court.                              Only in a

cursory footnote did the district court predict that even if the

statute applied to require MLM to show prejudice, it could have

“easily” done so.              Minn. Lawyers Mut. Ins. Co. v. Baylor &

Jackson, PLLC, 852 F. Supp. 2d 647, 662 n.8 (D. Md. 2012).                               It

is    on    this    slender      reed     that    the    majority      decision    rests.

Because      I      conclude       that    the     district         court     erroneously

interpreted Maryland insurance law, both with respect to whether

the   actual       prejudice       requirement     applies      and    whether     it   was

ultimately satisfied, I respectfully dissent.




                                             22
                                             I.

            The relevant facts are largely undisputed.                          In March

2006, Dawn Jackson of Baylor & Jackson initiated representation

of certain defendants in a contract action in Maryland state

court (the “Underlying Litigation”).                  When the plaintiffs in the

Underlying Litigation moved for summary judgment on July 27,

2006,    Baylor    &    Jackson      responded       on    August     11,    2006,     with

unsupported       allegations        where    disputed       material        facts     were

available and not presented and were required pursuant to the

Maryland rules of civil procedure to support their position.

The trial court promptly granted summary judgment against the

firm’s   clients       on   August    22,    2006.        See   ante    at     5-7.     The

Maryland   Court       of   Special    Appeals     affirmed      on     July    8,    2009,

relying in large part on Baylor & Jackson’s conspicuous failure

to present material facts sufficient to defeat summary judgment.

Id. at 7 (observing that the underlying defendants’ opposition

to   summary      judgment        “‘was      not     supported         by    affidavits,

deposition     testimony,         interrogatory           answers,     or      any    sworn

evidence as required by Maryland Rule 2–501’” (quoting Thomas v.

Robbins, No. 944, slip op. at 20-21 (Md. Ct. Spec. App. July 8,

2009) (unreported))).

            On the same day the appeals court issued its decision,

July 8, 2009, Baylor & Jackson notified its malpractice carrier,

MLM, of the potential for a claim.                    The firm’s former clients

                                             23
then filed a malpractice action against the firm over a month

later, on August 11, 2009.                 True to its word, MLM defended

Baylor & Jackson for over a year, until it abruptly disclaimed

coverage    on    October   1,     2010.        At   the   time    MLM    disclaimed,

mediation in the malpractice case had been scheduled just two

weeks later on October 11, 2010, with trial scheduled to start

December 6, 2010.

            MLM    filed    this   declaratory        action      on   September    29,

2010, in the United States District Court for the District of

Maryland.     On cross motions for summary judgment, the district

court granted judgment to MLM.              See Minn. Lawyers Mut. Ins. Co.

v. Baylor & Jackson, PLLC, 852 F. Supp. 2d 647 (D. Md. 2012).

This appeal followed.

                                         II.

                                           A.

                     The Untimely Notice of a Claim

            As    below,    Baylor   &     Jackson    vigorously         disputes   the

date on which its malpractice claim was deemed “made” under the

terms of its policy with MLM. 1            In the firm’s view, the claim was


     1
         The relevant policy language provides as follows:

     A CLAIM is deemed made when:

 (1) a demand is communicated to the INSURED for DAMAGES or
     PROFESSIONAL SERVICES;

(Continued)
                                           24
not made until the Maryland appeals court issued its decision on

July 8, 2009.     Using that date as a reference, its claim to the

insurer would have been timely under the policy then in force.

Like the district court and the majority here, I agree that a

claim was “made” in this case when Baylor & Jackson filed an

unsupported    response    to   the   motion     for   summary     judgment    on

August 11, 2006.     See ante at 13-16.          That is, the firm “kn[ew]

or   reasonably   should   [have]     know[n]”    that    filing    a   response

devoid   of   sufficient   material     facts,    where    such    facts   were

available, “would support” a demand for damages.              J.A. 275.       MLM

suggests that Baylor & Jackson should have known on August 22,

2006, the date on which the state trial court granted summary

judgment, though use of this latter date makes no difference:

either way, the claim was made while the 2006 policy governed.

Because I agree that the claim was made on August 11, 2006, the

2006 policy applies.




 (2) a lawsuit is served upon the INSURED seeking DAMAGES;
     or

 (3) an act, error or omission by any INSURED occurs which
     has not resulted in a demand for DAMAGES but which an
     INSURED knows or reasonably should know, would support
     such a demand.

J.A. 275.   Citations to the “J.A.” refer to the Joint Appendix
filed by the parties in this appeal.


                                      25
                 The    2006     policy      was   effective    August   1,   2006,    to

August 1, 2007.                Under the terms of the policy, a claim is

covered         only    if    made   and   reported    during    the   policy   period,

within 60 days after the end of the policy period, or during the

extended reporting period. 2                 Although the claim was “made” during

the period, that is, on August 11, 2006, it was not reported

until July 8, 2009.               Accordingly, Baylor & Jackson’s notice was

untimely.

                                               B.

                             Maryland’s Prejudice Requirement

                 As below, Baylor & Jackson alternatively argues that

even       if   its     notice    of   the    claim   was   untimely,    Maryland     law

requires MLM to prove it was actually prejudiced by the untimely

notice before it may lawfully disclaim coverage.                         See Md. Code

Ann., Ins. § 19-110.                 MLM responds that § 19-110 does not apply

such that they need make no showing of actual prejudice in order

to disclaim.             Addressing this central question, the district

court concluded the statute did not apply, thus relieving MLM

from its need to show actual prejudice by a preponderance of the

evidence.              The    majority     assumes    without    deciding     that    the

       2
       The policy at issue is a “claims-made”-type policy, to be
distinguished from an “occurrence”-type policy.     See Sherwood
Brands, Inc. v. Great Am. Ins. Co., 13 A.3d 1268, 1277-78 (Md.
2011) (explaining the difference between occurrence and claims-
made policies).



                                               26
statute applies because, in their view, MLM established actual

prejudice in either event.    See ante at 17-18.   Because I do not

agree that actual prejudice was shown, I must first determine

whether the statute applies before reaching the latter question.

                                 1.

  Section 19-110: Disclaimers of Coverage on Liability Policies

            Section 19-110 regulates the circumstances in which an

insurer may disclaim coverage on a liability insurance policy in

Maryland.    It states 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.

Md. Code Ann., Ins. § 19-110.         The statute was most recently

interpreted in Sherwood Brands, Inc. v. Great American Insurance

Co., 13 A.3d 1268 (Md. 2011).         The district court relied on

Sherwood Brands and T.H.E. Insurance Co. v. P.T.P. Inc., 628

A.2d 223 (Md. 1993), in determining that the statute did not

apply.      Contrary to the district court’s reasoning, however,

Sherwood Brands makes clear that the statute applies in this

case to require MLM establish actual prejudice before it can

properly disclaim coverage.



                                 27
              In Sherwood Brands, 13 A.3d at 1270, Great American

had issued to Sherwood, a manufacturing company, a series of

annual    policies        providing      liability       insurance.            The       relevant

policy term was effective May 1, 2007, to May 1, 2008.                                   Id.     On

December      11,        2007,     a     former        employee          filed     with        the

Massachusetts            Commission          Against     Discrimination              a       claim

asserting     breach       of    contract,      wrongful       termination,            and     many

other    complaints.            Id.    at     1272.      He    also      filed     a     related

complaint     in     Massachusetts           state     court     on      March    28,        2008,

against     Sherwood         and       its     subsidiaries,          asserting          similar

theories.      Id.       Both the agency proceeding and the Massachusetts

state court proceeding were filed and served on Sherwood during

the pendency of the 2007–08 policy.                           Id.        Sherwood did not

notify Great American of the claim until October 27, 2008, a

date conceded to be after the end of the policy period.                                   Id. at

1271–72.      Great American denied coverage because the notice was

untimely.      Id. at 1272.             During the subsequent coverage suit,

the   trial    court       granted      summary       judgment      to    Great      American,

concluding the untimely notice justified the disclaimer and the

insurer was not required to demonstrate prejudice resulting from

Sherwood’s late notice.                Id. at 1273-74.          The Maryland Court of

Appeals vacated the trial court’s judgment and held that § 19-

110   applied       to    the    policy       and,     therefore,        the     insurer       was



                                               28
required to show it was actually prejudiced by Sherwood’s late

notice before disclaiming coverage.                 Id. at 1270.

               Sherwood Brands began its discussion by engaging in a

historical          exploration      of    the    development      of   §    19-110    in

Maryland.           This    included      several   key    cases    and      legislative

amendments to the state code which shaped Maryland’s notice-

prejudice jurisprudence, as well as an explanation of the types

of policies implicated by § 19-110. 3                  See id. at 1277-79.        Rather

than       simply    join     most   jurisdictions       by    concluding      that   the

prejudice requirement does not apply to “reporting-type” claims-

made       policies,    the    court      recognized    that    Maryland’s      statute,

§ 19-110, softens the harsh result (a forfeiture) that would

follow from the late notice of an insurance claim.                          See Sherwood

Brands, 13 A.3d at 1277 (“Although the policy may speak of the

notice provision in terms of ‘condition precedent,’ . . . .

nonetheless what is involved is a forfeiture, for the carrier

seeks, on account of a breach of that provision, to deny the

insured the very thing paid for. . . .                    Thus viewed, it becomes

unreasonable to read the provision unrealistically or to find

that the carrier may forfeit the coverage, even though there is

no likelihood that it was prejudiced by the breach.” (internal

       3
       In 1996, the Legislature recodified former § 482 to
Maryland Code (1997, 2006 Repl. Vol.), Insurance Article § 19–
110.



                                             29
quotation marks omitted)).    In view of these principles, the

court concluded that § 19-110’s prejudice requirement may apply

to a reporting-type claims-made policy. 4     See id. at 1284-85

(footnotes omitted).

          Sherwood Brands turned next to the text and policies

underlying § 19-110, explaining as follows:

     Section 19–110 begins by stating that “[a]n insurer
     may disclaim coverage . . . on the ground that the
     insured . . . has breached the policy . . . .”
     Accordingly, in order for § 19–110 to be in play, the
     insured must breach the insurance policy “by failing
     to cooperate with the insurer or by not giving the
     insurer required notice.” See House, 315 Md. at 355,
     554 A.2d at 417 (stating that, because the statute
     requires the insured to have “breached the policy,”
     the   statute  only “potentially   applies   to  ‘any’
     liability insurer or policy”) (emphasis in original).
     Central to whether § 19–110 applies to require Great
     American to show that it was prejudiced by Sherwood’s
     late-delivered notice is determining whether, in
     giving Great American notice more than ninety days
     after the expiration date of the 2007–08 Policy,
     Sherwood “breached the policy.”        If the notice
     provisions of the 2007–08 Policy are “conditions
     precedent” to coverage, then Sherwood does not “breach
     the policy” by failing to obey the notice provisions;
     the nonoccurrence of a condition precedent does not
     constitute a breach, it merely relieves the other
     party from performing under the contract/policy.    On
     the other hand, if the notice provisions are deemed

     4
       This conclusion directly conflicts with the common law of
many states. See Sherwood Brands, 13 A.3d at 1282-83. Notably,
the court also explicitly acknowledged that two decisions of the
United States District Court for the District of Maryland and
one unpublished decision of our court erroneously applied
Maryland law by concluding that reporting-type claims-made
policies are not subject to the actual prejudice requirement of
§19-110. See id. We should not compound those errors here.



                               30
        covenants, Sherwood’s failure to give Great American
        notice no later than ninety days after the expiration
        date of the 2007–08 Policy would constitute a “breach
        of the policy,” such that § 19–110 would apply to
        require Great American to show that it was prejudiced
        by Sherwood’s late-delivered notice.

Id. at 1286 (emphasis in original and citation omitted).                      The

court     further   explained    that    even     if   the    policy     language

expressly     denotes   the     notice       requirement     as   a    “condition

precedent” to coverage, “the purpose and effect” of § 19–110

“mandates that the notice provisions of the Policy be treated as

covenants, not conditions.”        Id. at 1286-87.

            The court concluded as follows:

     We hold that § 19–110 does not apply, as was the case
     in T.H.E., to claims-made policies in which the act
     triggering coverage -- usually notice of a claim or
     suit being filed against and served upon an insured
     under third-party liability policies -- does not occur
     until after the expiration of the liability policy, as
     this non-occurrence of the condition precedent to
     coverage is not a “breach of the policy,” as required
     by the statute. On the other hand, we hold that § 19–
     110 does apply, as is the case at present, to claims-
     made policies in which the act triggering coverage
     occurs during the policy period, but the insured does
     not   comply   strictly   with  the   policy’s  notice
     provisions. In the latter situation, § 19–110 mandates
     that notice provisions be treated as covenants, such
     that failure to abide by them constitutes a breach of
     the policy sufficient for the statute to require the
     disclaiming insurer to prove prejudice.

Id. at 1288 (emphasis supplied).                In this case, we face the

latter scenario.




                                        31
                                        2.

             Application of § 19-110 and Sherwood Brands

            In view of Sherwood Brands, the key question we must

ask in order to determine if § 19-110 applies is when did the

act   triggering    coverage    occur?       If    it    occurred    after      the

expiration of the liability policy, as was the case in T.H.E.,

there is simply no policy which the insured can breach when it

fails to notify the insurer of the claim.                    Since there’s no

policy, there’s no breach, and the express terms of § 19-110 do

not apply.       On the other hand, if the act triggering coverage

occurred during the policy term, but where the insured fails to

notify the insurer according to the policy’s requirements, the

notice requirement is a covenant that is breached, allowing the

insurer     to   disclaim   coverage     only     if    it   can   show     actual

prejudice.       In this case, we look to the policy language to

determine when the act triggering coverage occurred.                 The policy

states:

      A CLAIM is deemed made when:

      (1)    a demand is communicated to the                 INSURED      for
            DAMAGES or PROFESSIONAL SERVICES;

      (2)    a lawsuit is      served    upon     the   INSURED     seeking
            DAMAGES; or

      (3) an act, error or omission by any INSURED occurs which
          has not resulted in a demand for DAMAGES but which an
          INSURED knows or reasonably should know, would support
          such a demand.


                                        32
J.A. 275.

             Neither of the first two options apply here.                          Instead,

the   act   triggering       coverage    in       this    case    is    subsection      (3).

Indeed,     MLM    itself     contends       that    Baylor       &    Jackson     knew    or

reasonably        should    have     known    that       their    failure     to     supply

evidence in opposition to a motion for summary judgment would

support a demand for damages.                 That date, as suggested by MLM,

is either the date on which Baylor & Jackson filed their summary

judgment    response,       August    11,     2006,       or   when    the   trial    court

granted summary judgment, August 22, 2006.                        Whichever the date,

both clearly fall within the policy term for the 2006 Policy,

which was effective August 1, 2006, to August 1, 2007.                              Because

the act triggering coverage in this case occurred during the

relevant policy term, the notice provision of the policy is a

covenant, not a condition precedent, and thus § 19-110 applies.

See Sherwood Brands, 13 A.3d at 1288 (“[W]e hold that § 19–110

does apply, as is the case at present, to claims-made policies

in which the act triggering coverage occurs during the policy

period,     but    the     insured    does    not        comply   strictly       with     the

policy’s notice provisions.”). 5


      5
       In holding otherwise, the district court simply stated
that the policy at issue here is more like the one in T.H.E.,
and emphasized the fact that the policy language in this case
makes the notice requirement a condition for coverage.   But as
Sherwood Brands makes clear, Maryland law does not care how the
(Continued)
                                             33
            MLM     must      therefore        establish     it     was    actually

prejudiced by the untimely notice in order to properly disclaim

coverage.

                                          3.

                           Proof of Actual Prejudice

                                          a.

                             Burden on the Insurer

            MLM     has     not   demonstrated      actual        prejudice     by    a

preponderance of the evidence as required by § 19-110, offering

only speculation as to what it would have done had notice been

timely.

            “The    insurer       bears   the    burden      of    proof   to     show

prejudice.”       Prince George’s Cnty v. Local Gov’t Ins. Trust, 879

A.2d 81, 97 (Md. 2005) (citing Md. Code Ann., Ins. § 19-110

(insurer must establish actual prejudice “by a preponderance of

the   evidence”));        Sherwood   Brands,     Inc.   v.   Hartford      Acc.      and

Indem. Co., 698 A.2d 1078, 1083 (Md. 1997) (under § 19-110, “the




notice provision is couched when determining whether the
provision is a covenant or condition precedent; what matters is
when the act triggering coverage occurred.         If the act
triggering coverage (i.e., when the claim is “made”) occurred
during the policy period, the statutory prejudice requirement
applies.   If the act triggering coverage falls outside of the
policy term, the prejudice requirement does not apply because
there was never a policy to be breached. The district court did
not address this pivotal distinction.



                                          34
insurer     must    establish    by   a     preponderance   of    affirmative

evidence that the delay in giving notice has resulted in actual

prejudice to the insurer” (emphasis supplied)).

                                       b.

                   More Than Mere Speculation Necessary

            Critically, § 19-110 requires an insurer to prove that

it suffered actual harm:        “The requirement of ‘actual prejudice’

means that an insurer may not disclaim coverage on the basis of

prejudice that is only possible, theoretical, conjectural, or

hypothetical.”       Gen. Acc. Ins. Co. v. Scott, 669 A.2d 773, 779

(Md. 1996).        “Nor is it enough to surmise harm that may have

occurred by virtue of the passage of time; prejudice cannot be

presumed from the length of the delay.” Id.                  An insurer may

properly disclaim coverage on the basis of untimely notice only

if it can prove that -- as a matter of fact -- it actually

suffered prejudice in its ability to investigate, settle, or

defend the claim.      See Sherwood Brands, 13 A.3d at 1287.

            Naturally,    the   potential     for    prejudice   due   to   late

notice is greatest where “the insurer has been deprived of all

opportunity    to    defend”    the   claim   made    against    the   insured.

Prince George’s Cnty, 879 A.2d at 98 (internal quotation marks

omitted).     In fact, Maryland’s highest court has concluded that

an insurer is prejudiced as a matter of law when the insured

fails to notify the insurer of the incident, claim, and lawsuit

                                       35
until after an adverse judgment has been entered against the

insured.        See id. at 100.            Indeed, the majority quotes Prince

George’s      County    for    this      principle,      stating    “‘The     case    for

finding prejudice as a matter of law is strongest for primary

insurers who receive notice after a judgment because the late

notice deprives the primary insurers of their right to control

the investigation, defense, and settlement of claims.’”                           Ante at

19 (quoting Prince George’s Cnty, 879 A.2d at 97).                         True enough.

However,      the     proposition        does    not     support     the     majority’s

conclusion in view of the facts of this case.

              In    Prince    George’s      County,      the    Maryland     court    was

speaking to the malpractice judgment entered against the insured

-- not about underlying conduct by the insured giving rise to

the   lawsuit       against   it.        Indeed,    in   this     case,    the    insured

notified MLM several weeks before it was sued by its former

clients.       This is not the case of an insured who failed to

notify its insurer until after a malpractice judgment is entered

against it (the insured).

                                            c.

                                        Actual Harm

              Regardless,          as    Maryland        case     law      articulates,

prejudice is all about harm to the insurer.                      See Prince George’s

Cnty,   879    A.2d     at    95    (“If   the     insured      violates    the    notice

provision without harming the interests of the insurer -- i.e.

                                            36
without    prejudice       --        then     there       is        no     reason       to     deny

coverage.”).       Thus,       the    question       is    not       how    MLM       could    have

helped Baylor & Jackson had notice been timely, but how was MLM

actually harmed by its inability to do so as a result of the

untimely notice.

            In my view, MLM has not established by a preponderance

of   the   evidence    that      it     was        actually         harmed       by    Baylor    &

Jackson’s untimely notice.                  The 2006 Policy term was in force

August 1, 2006, to August 1, 2007, and included an additional

60-day extension period.              The date on which the insured reported

the “claim” to the insurer was August 11, 2009, the same day the

appeals    court    decision         affirmed      the    summary          judgment       granted

against the firm’s clients.                 Thus, MLM knew as of that date that

a    malpractice      suit      against         Baylor          &        Jackson       might    be

forthcoming.       Indeed, once the suit was brought, MLM provided a

defense    to   Baylor     &    Jackson        for       more       than     a     year      before

disclaiming coverage.           This denial of coverage took place just

weeks before a scheduled mediation conference on October 11,

2010, and only three months before trial.                                It is telling that

there is no suggestion from MLM that it disclaimed coverage at

that time because they found themselves somehow harmed by the




                                              37
late notice. 6        MLM simply asserted (at the time) that it was

disclaiming pursuant to the terms of the Policy requiring timely

notice.    See J.A. 339.

              MLM’s only argument on this issue does not address the

harm or prejudice to itself, but only to how it might have

assisted Baylor & Jackson had notice been timely, namely, that

MLM was unable to assist the firm in possible “mitigation and

remediation efforts.”          Appellee’s Br. 38.          Attempting to flesh

this   out,    MLM    asserts,   “[h]ad     Baylor   &   Jackson    given   timely

notice of the malpractice to MLM, MLM could have advised Baylor

&   Jackson    to    admit   fault   [in    a   motion   for    reconsideration],

argue that the error was through no fault of Baylor & Jackson’s

clients,      and    argue   that    Baylor     &   Jackson’s    error   did   not

prejudice the opposing side.”              Id. at 38-39 (emphasis supplied).

MLM suggests, “[s]uch an argument that an attorney’s conduct

constitutes excusable neglect has persuaded previous courts to

forgive the mistake and permit a refiling,” but notably cites to

no cases and makes no mention of its own actual injury.                        J.A.

70.    This contention is speculation at best and again does not

address the issue of actual harm caused to MLM by the late

       6
       See Sherwood Brands, Inc. v. Hartford Acc. and Indem. Co.,
698 A.2d 1078, 1083 (Md. 1997) (observing that delay in giving
notice apparently played no material role in insurer’s decision
not to defend where insurer did not raise prospect of prejudice
until coverage suit).



                                           38
notice.       MLM has offered no other grounds for its contention

that it suffered actual prejudice.

              The district court accepted the insurer’s argument in

a footnote, stating,

       Even if MLM were required to show prejudice, it could
       have easily done so by showing it had been excluded
       from    the   post-summary-judgment    and   appellate
       proceedings in the Robbins v. Thomas case; those were
       the only opportunities MLM could have had to fashion a
       request for relief. Whether it would have been
       successful with such a request is immaterial to the
       prejudice flowing from the lack of notice that would
       have enabled it to participate meaningfully in the
       litigation.

Minn. Lawyers Mut. Ins. Co. v. Baylor & Jackson, PLLC, 852 F.

Supp.    2d    647,    662    n.8    (D.   Md.    2012).        I    am    not       as   easily

persuaded as the district court, for I do not see how the above

possibilities establish actual harm as a matter of fact by a

preponderance of the evidence.                   The suppositions proffered by

the district court, even if reasonable, are still speculative,

and do not speak to any harm MLM actually suffered.

              The     majority       reasons     that    Baylor      &     Jackson’s       late

notice       “hindered       MLM’s    ability      to    fulfill          its    contractual

duties,” observing that by the time the appeals court issued its

opinion, “MLM had few options” by the time it received notice.

Ante    at    18.      To    the     contrary,     MLM    had       the    opportunity       to

mitigate      the     potential      malpractice        claim   before          it   was   even

filed, as it received notice of a possible claim over a month


                                            39
before litigation commenced.                 And even thereafter, MLM defended

the case for over a year before abruptly disclaiming coverage

just as the pretrial practice reached its zenith.                           Even giving

MLM the benefit of the doubt, it is far from clear that the

untimely notice left them with “few options.”                      Id.

               Instead, the majority rests its analysis on MLM’s mere

assertion       that    the    untimely       notice         “‘prevented        [MLM]       from

advising Baylor & Jackson to file a motion for reconsideration,

assisting      Baylor    &    Jackson    in       crafting       arguments        for       that

motion,     and/or      assisting       in    the       appeal.’”          Id.        (quoting

Appellee’s Br. 38).            But as explained above, even if we assume

MLM knew of the malpractice immediately, advised the firm to

file the motion for reconsideration, and otherwise assisted in

the   appeal,     MLM    has    presented         no   facts    showing     how        it   was

actually harmed by its inability to take these discreet steps.

               The speculative nature of MLM’s claims of prejudice

stands    in    stark    contrast       to    those      Maryland    cases        where      an

insured notified its insurer of a claim so late that it had

little    or     no     opportunity      to       participate       in     or     otherwise

influence      the     litigation     against          the    insured.          See     Prince

George’s Cnty., 879 A.2d at 100 (insurer actually prejudiced

where insured “failed to notify insurer of the incident, claim,

and lawsuit until after an adverse judgment was entered” against

the insured); see id. at 94-96 (citing cases).

                                             40
               But even in a case far closer than presented by this

appeal, a Maryland appeals court did not find actual prejudice.

In General Accident Insurance Co. v. Scott, 669 A.2d 773, 775–77

(Md.    Ct.    Spec.    App.   1996),       cert.        denied,   673    A.2d     707    (Md.

1996), the insured did not notify the insurer of a claim until

29 months after the accident giving rise to the claim.                                        The

insurer contended that it was prejudiced by the delay because it

could not fully investigate the underlying facts, evaluate its

potential exposure, participate in the decision as to whether to

submit    the    case    to    arbitration,          and       decide    whether    to        set

high/low parameters.           Id. at 779.          The Maryland Court of Special

Appeals        concluded       that        the     insurer’s        allegations           were

insufficient to show that it suffered actual prejudice because

“conclusory      allegations         about       difficulties      and    inconveniences

that    would     result      from    any        delay    in    notification       are        not

sufficient” to create a material dispute of fact with respect to

the issue of prejudice.               Id. (emphasis in original).                  I submit

that the case before us presents far fewer persuasive claims of

prejudice than in Scott, a case where no actual prejudice was

found     to    have    even    been       alleged,        much    less    proven        to     a

preponderance of the evidence.

               Had MLM been actually prejudiced by the late notice, I

would    have    expected      it     to    have     presented      facts    before           the



                                             41
district court indicating as much.       It did not there and has not

here.

          Perhaps   recognizing   that   it   failed   to   prove   actual

prejudice, MLM asks us, alternatively (and tellingly), to remand

the case to give it another chance.       See Appellee’s Br. 37 (“If

this Court, however, determines that Section 19-110 does apply

to the Policy, it should remand this case to the District Court

for a determination as to whether MLM has established actual

prejudice.   While the District Court noted in a footnote that

MLM would easily be able to show actual prejudice, it did not

actually reach that issue and it did not make a full factual

finding in its Opinion.” (emphasis supplied)).              This argument

leaves the distinct impression that MLM is well-aware of the

absence of actual prejudice. 7

                                  III.

          At bottom, the purpose of a notice requirement in an

insurance policy is to protect the insurer “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.”            Prince George’s


     7
       MLM has not articulated any sound basis for remand.   It
filed this action for a declaratory judgment and has the burden
of proof. MLM has simply failed to present any facts to satisfy
its burden.



                                   42
Cnty, 879 A.2d at 95.             But under Maryland law, if the insurer is

not actually harmed by the untimely notice, “then there is no

reason to deny coverage.”             Id.    The notice clause should not be

used by the insurer as a “technical escape-hatch by which to

deny   coverage        in   the    absence       of   prejudice.”    Id.   (internal

quotation      marks    and     citation     omitted).         MLM   should   not   be

allowed   to    so     easily     subvert    the      public   policy   embodied    in

Maryland’s considered legislative judgment without showing how

it was actually harmed by the untimely notice.                       As a result, I

would reverse the judgment of the district court.




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