"It was an incredible match today", said world No.48 Lajovic, the lowest-ranked player to reach the final here since Hicham Arazi in 2001.
Nadal's loss should also be a little concerning because the French Open - also played on clay and a tournament Nadal has won 11 times, including the last two years - is a little more than a month away.
Seeking a 12th title in Monte-Carlo, cracks were perhaps beginning to show in the previous round, as Nadal had to battle back from 4-1 down in the first set against Guido Pella, before eventually taking it on a tie break.
Britain's Jamie Murray and Brazilian partner Bruno Soares lost 7-6 (7-4) 6-4 to Dutchmen Robin Haase and Wesley Koolhof in the doubles semi-finals.
Rainy, breezy, chilly heading into the weekend — FORECAST
A spectacular forecast is ahead for the start of our weekend, as highs soar into the 70s and 80s across the Front Range. By the afternoon, clouds increase and scattered showers can be expected, especially for counties west of the Blue Ridge.
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Ten - Concern: However, the absence of Anunoby was still felt in Terrence Ross's 15 points off the bench. As Lowry ambled to the line, the Toronto crowd cheered in anticipation of his first point of the series.
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Boston was involved in another defensive slugfest but got things going late to steal victory from the jaws of defeat in Game 2. But then Boston got hot, using a 16-0 run, including eight straight by Irving, to take an 86-82 lead with 5:04 to play.
Nadal's usual composure was ruffled, both by the blustery conditions in Monte Carlo and Fognini's unpredictable, emotional playing style. After 2 hours, 20 minutes on court, a relieved Nadal hugged his opponent at the net. He complained to the umpire, perhaps to get the point replayed, and then angrily put the offending towel into his drinks box. This is easily some of the best tennis we've ever seen from Lajovic at 28 years old.
Fognini irate, Nadal serving for a 4-1 lead-another comfortable Nadal route to the final looked on.
Momentum was on Fognini's side, not to mention some luck.
Playing spectacular tennis, Fognini was in full flow and he hit a delightful two-handed, backhand cross-court victor to break at the start of the second set.
The result ended the second seed's 18-match winning streak in Monte Carlo - he had not even dropped a set there since his clash with Kyle Edmund in the second round two years ago.
Many Italian fans likely made the short trip along the coast from nearby San Remo-where Fognini grew up. "After that, the match changed a lot", Nadal said.
It could have been an all-Serb semifinal but Medvedev knocked out the top-ranked Djokovic in Friday's quarterfinals.