Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

Eastern Shore Title Co. v. Ochse

Court of Appeals of Maryland

May 31, 2017

EASTERN SHORE TITLE COMPANY
v.
STEVEN J. OCHSE, ET AL.

          Argued: October 6, 2016

          Barbera, C.J., Greene, Adkins, McDonald, Watts, Getty, Battaglia, Lynne A. (Senior Judge, Specially Assigned), JJ.

          OPINION

          Getty, J.

         “The long and winding road that leads to your door Will never disappear I've seen that road before

         But still they lead me back to the long winding road . . ."

         The Beatles, The Long & Winding Road (Apple Records 1970).

         In this case, the long and winding road virtually disappeared and, more regrettably, went undetected during the title search for the 2001 sale of a five-acre residential lot in Dorchester County. Eastern Shore Title Company ("ESTC"), Petitioners and Cross-Respondents, conducted the title search for Mr. Steven Ochse and Ms. Shari Ochse ("the Ochses"), Respondents and Cross-Petitioners, when they purchased the lot from Mr. William Henry and Ms. Jessie Henry ("the Henrys").

         However, vestiges of the road leading to the Ochses' door were evident in the physical remains of a gravel roadbed. To further compound the confusion, an outline of the roadbed was documented on the Henrys' subdivision plat[1] but was mistakenly designated as a "driveway." In the course of improving the property, a landscape contractor advised the Ochses about his suspicions that the gravel roadbed was more than just a "driveway." After further investigation, the Ochses filed their initial lawsuit to quiet title against the Henrys ("the Henry litigation").

         After residing on the property for approximately seven years, the Ochses finally learned during the Henry litigation that the "driveway" encumbrance bisecting their lot was actually part of a thirty-foot-wide strip of land, which had been granted in fee simple determinable to Dorchester County by a 1919 deed for the purpose of making a new county road. Thereafter, the Ochses' melancholy ballad took a long winding road through Maryland's appellate courts (see E. Shore Title Co. v. Ochse, No. 0999, 2015 WL 9590716, at *1 (Md. Ct. Spec. App. 2015); Ochse v. Henry, 216 Md.App. 439 [hereinafter Ochse 2], cert. denied, 439 Md. 331 (2014); Ochse v. Henry, 202 Md.App. 521 (2011) [hereinafter Ochse 1], cert. denied, 425 Md. 396 (2012)); but still it leads them back to this Court on issues of the collateral litigation doctrine and the collateral source rule.

         The underlying case to this appeal is a lawsuit collateral to the Henry litigation that was filed by the Ochses on June 25, 2010 in the Circuit Court for Talbot County against Chicago Title Insurance Company ("Chicago Title")[2] and ESTC, the title examiner, in which the Ochses alleged that ESTC breached the contract intended to benefit the Ochses and was negligent in its title examination. The trial court found in favor of the Ochses and, as a result, awarded them compensatory damages for their litigation costs and expenses, including a $215, 710.60 judgment against ESTC and Chicago Title, which was the amount of the attorney's fees awarded to the Ochses in the Henry litigation.

         ESTC and Chicago Title thereafter moved to alter or amend that judgment, pointing out that the Henrys had already paid the attorney's fees awarded in the Henry litigation. The trial court granted that motion and reduced its judgment against ESTC and Chicago Title by the full $215, 710.60-the amount of attorney's fees that the Ochses had already recovered from the Henrys in the Henry litigation. The Ochses and ESTC appealed the case to the Court of Special Appeals. In an unreported opinion, the Court of Special Appeals remanded the case for a determination of whether the collateral litigation doctrine applied and to clarify the attorney's fees award. E. Shore Title Co., 2015 WL 9590716, at *18, *21.

         ESTC petitioned this Court for a writ of certiorari, and the Ochses filed a cross-petition. We granted both the petition and the cross-petition on May 20, 2016. E. Shore Title Co. v. Ochse, 448 Md. 29 (2016). We hold that, in order to recover attorney's fees against a negligent title searcher using the collateral litigation doctrine theory of damages, the plaintiff must show that the title searcher's negligence proximately caused the plaintiff to file a necessary collateral action, resulting in the plaintiff incurring reasonable litigation costs or expenses necessarily and in good faith, and that the plaintiff has not otherwise received compensation for those costs and expenses. Thus, we reverse the judgment of the Court of Special Appeals, and affirm the judgment of the trial court.

         I Background

         A. Factual Background

         The underlying facts and procedural paths of this case and the collateral case have been thoroughly described in three appellate opinions. See E. Shore Title Co., 2015 WL 9590716, at *1; Ochse 1, 202 Md.App. at 521; Ochse 2, 216 Md.App. at 439. We restate the facts that are relevant to this appeal, all of which are uncontested.

         1919 County Road Deed

         The elusive 1919 county road deed was executed on March 2, 1919, and was recorded on May 27, 1919 among the Land Records for Dorchester County Maryland in Liber W.H.M. 6, folio 332. A total of fourteen property owners conveyed portions of their land to Dorchester County to create a thirty-foot-wide strip of land, "for the purpose of making a new county road." According to the deed, the strip of land had been "marked out, partly cut out and opened."[3] Dorchester County thus acquired a fee simple determinable interest in the strip of land.[4] However, the deed included a reversionary clause, which stated that "if the [county road] is abandoned by the said County Commissioners of Dorchester County, or their successors in interest, the lands hereby conveyed shall revert back to the said grantors, their heirs and assigns, so far as the same are within the bounds of the lands of the respective grantors heretofore mentioned."

         Chronology of Pertinent Property Interests

         One of the fourteen property owners was Henry B. Messenger, who held title to approximately 150 acres of land in this vicinity south of Federalsburg.[5] Over the years, portions of Mr. Messenger's property were conveyed to various property owners. Of significance to this litigation, one of those conveyances-Mr. Messenger's conveyance on August 30, 1966 of two parcels to the Mayor and Council of Federalsburg for conservation efforts along Marshythorpe Creek, which adjoined his property-referenced two plats that depict a roadway labeled as a "county road" within the vicinity of Mr. Messenger's remaining property (the "1966 plats").[6]

         Subsequently, a thirty-five-acre parcel of the Messenger property was conveyed on June 29, 1972 by Esther White Messenger[7] to R.T.R., Inc. On March 18, 1987, R.T.R., Inc. conveyed the same property by deed[8] to the Henrys. This thirty-five-acre parcel ultimately purchased by the Henrys included the county road owned by Dorchester County as referenced in the 1919 deed and 1966 plats.

         In 1998, the Henrys subdivided this parcel to create a lot of approximately five acres that included the county road, known as 2890 Mowbray Creek Road, Federalsburg.[9] Then, on September 13, 2001, Mr. and Ms. Ochse entered into a contract with the Henrys to purchase the subdivided parcel of land for $325, 000.00 (the "Contract of Sale"). The Contract of Sale, which was in the standardized form of a Maryland Residential Contract of Sale, provided that "[t]itle to the Property . . . shall be good and merchantable, free of liens and encumbrances except as specified herein."

          Significantly to this appeal, the Maryland Residential Contract of Sale, signed by the parties, contained a standard form fee-shifting provision, which stated:

In any action or proceeding between the [Ochses] and the [Henrys] based in whole or in part, upon performance or no performance of the terms and conditions of this Contract, including, but not limited to, breach of contract, negligence, misrepresentation or fraud, the prevailing party in such action or proceeding shall be entitled to receive reasonable attorney's fees from the other party as determined by the court arbitrator.

         The Contract of Sale further specified that "[t]he [attorney's fees] provision . . . shall survive closing and shall not be deemed to have been extinguished by merger with the deed."

         Ochse Property Title Search

         The Ochses received a policy of title insurance from Chicago Title, which guaranteed and represented that the Ochses' property title was precisely as depicted in the 1998 subdivision plat. As an agent of Chicago Title, and for the benefit of the Ochses, ESTC performed the title search, prepared a title insurance binder and drafted the deed. It is uncontested that the Ochses were the customers of ESTC and dealt directly with ESTC. The title search and title insurance binder were intended to "permit [the Ochses] to make an informed decision whether to proceed with the purchase."[10]

         Closing on the 2890 Mowbray Creek Road Property

         On December 14, 2001, at a real estate closing conducted by the general manager of ESTC, Veronica Wainwright, the Ochses acquired as tenants by entireties, via deed, [11] a fee simple interest in 2890 Mowbray Creek Road. The Ochses' deed included a provision (the "driveway provision") indicating that their property interest was "SUBJECT, HOWEVER, to the rights of others legally entitled to the use of a 'Driveway', for purpose of ingress, egress and regress, over [the Ochse Property]."

         At a subsequent trial proceeding, the Ochses testified that they asked Ms. Wainwright about the meaning of the provision's language during the closing, and that she verbally advised the Ochses that the driveway provision referred to utility easements, with the utility companies being the unidentified "others" in the provision.[12]

         Discovery of Ochses' Property Title Defect

         After residing at the property for four years, the Ochses hired a contractor in 2005 to undertake significant renovations and landscaping to their home. Based upon an inquiry from the contractor and prior to finalizing the renovation plans, Ms. Ochse reviewed the property deed to determine whether the gravel roadbed could be removed and contacted ESTC for clarification. In response to Ms. Ochse's questions, ESTC performed a second title search. This second title search again failed to uncover the 1919 county road deed. Based on this second attempt, ESTC offered a new theory that the "driveway provision" in the Ochses' deed was not for utility easements, as originally represented to the Ochses at closing, but instead a right-of-way for the benefit of the Henry property. ESTC offered to prepare a release for the Henrys' signature to quitclaim any and all rights and eliminate the driveway provision from the Ochses' deed. However, when presented with the draft release, the Henrys would not agree to sign it or to relinquish their claims to any right-of-way over the Ochses' property.

         The Ochses subsequently wrote a letter to their title insurer, Chicago Title, alerting the insurer to the presence an "undisclosed right of-way" that they contended ESTC had either "failed to pick up on" during the course of the title search, or failed to list in their Owners Policy. In the letter, the Ochses requested that Chicago Title "initiate a claim on [their] behalf against Eastern Shore Title Company." Chicago Title denied the claim, referring to a portion of the Ochses policy that excepted from coverage "easements . . . and other limitations" shown on the 1998 subdivision plat. The Ochses subsequently retained an attorney who continued to pursue obtaining a release from the Henrys, but without success.[13]

         B. Procedural History

         The Henry Litigation

         Consequently, on December 11, 2007, the Ochses filed a complaint against the Henrys in the Circuit Court for Dorchester County ("the circuit court") seeking reformation of their deed and for declaratory, injunctive, and related relief. The Ochses sought damages for breach of contract, breach of special warranties, and fraud in the inducement based on the driveway provision in their deed.

         Thereafter, on February 22, 2008, seven years after purchasing the 2890 Mowbray Creek Road property, the Ochses finally learned of the true legal status of the gravel roadbed-which up until that time they had presumed was, as stated in their deed, a driveway within property which they owned and over which some others merely had rights-of-way-when an attorney representing the Henrys mailed a letter to the Ochses' counsel revealing the existence of the 1919 county road deed, and Dorchester County's ownership of the county road. Then, the Henrys' attorney mailed a second letter to the Ochses' counsel stating that the Ochses' only remedy was to petition Dorchester County to convey the county road to the Ochses and that any judgment against the Henrys was fruitless because they could not deliver title for the roadbed to the Ochses.

         Instead, on April 11, 2008, the Ochses filed an amended complaint, in which they added Dorchester County as an interested party defendant, while maintaining the same claims as in their earlier complaint: reformation of the deed, declaratory relief, injunctive relief, and damages for breach of contract, breach of special warranties, and fraud in the inducement. The amended complaint requested the circuit court to remove the driveway provision from the Ochses' deed, and to declare that Dorchester County did not have a fee simple interest in the county road. The Henrys thereafter filed a counterclaim seeking an award of attorney's fees pursuant to the fee-shifting provision of the Contract of Sale that specifically survived merger with the deed.

         On May 13, 2008, Dorchester County filed an answer to the Ochses' amended complaint and asserted its fee simple interest in the county road. On August 4, 2008, Dorchester County filed a motion for summary judgment asserting that there was no dispute of material fact regarding Dorchester County's ownership of the county road, including that portion of it described as a "driveway" in the Ochses' deed. Dorchester County asserted that it did not abandon, convey away, or otherwise dispose of its interest in the county road. On October 29, 2008, after a hearing, the circuit court granted Dorchester County's motion for summary judgment declaring that Dorchester County owned the thirty-foot-wide strip of land in fee simple.

         The circuit court subsequently held a two-day bench trial, on May 26 and 27, 2009, as to the surviving claims made in the Ochses' amended complaint, as well as the Henrys' counterclaim for attorneys' fees pursuant to the fee-shifting provision in the Contract of Sale. Ultimately, in a written opinion and order entered September 18, 2009, the circuit court denied relief to the Ochses, "conclud[ing] that the [Contract of Sale] merged into the deed and that there was no breach of the special warranties of title." Ochse 1, 202 Md.App. at 528. The circuit court, however, granted the Henrys' counterclaim, and subsequently, in a supplemental order entered on October 20, 2009, awarded the Henrys $100, 020.00 in attorney's fees[14] to be paid by the Ochses.

         The Ochses appealed all of the circuit court's judgments to the Court of Special Appeals. Ochse 1, 202 Md.App. at 521. The Ochses also filed a petition with the County Council for Dorchester County, requesting that the county close, abandon, and convey to them the portion of the county road lying across their property.[15] E. Shore Title Co., 2015 WL 9590716, at *6. Following court-ordered mediation before the Court of Special Appeals, the parties filed a consent motion to stay proceedings before that court pending the disposition of the petition by Dorchester County. After that petition was granted through a bill passed by the Dorchester County Council, "the county conveyed its interest in the 30-foot wide strip to the Ochses" through a quit-claim deed.[16] Ochse 1, 202 Md.App. at 525. Dorchester County was then dismissed from the Court of Special Appeals case.

         The Court of Special Appeals then proceeded to review the circuit court's judgments to deny the Ochses' breach of contract, breach of special warranties, and fraud in the inducement claims, and to grant the Henrys' attorney's fees counterclaim. The intermediate appellate court determined that the circuit court did not err in its conclusions that the Henrys had neither breached the special warranties of encumbrance or of title, nor fraudulently induced the Ochses into entering the Contract of Sale. Id. at 530-42. But, the Court of Special Appeals also determined that there was a mutual mistake between the Henrys and Ochses and, therefore, the Contract of Sale did not merge into the deed, "and the Ochses should have been able to sue on the contract." Id. at 542-43.[17] The intermediate appellate court held, however, that the central issue underpinning the Ochses' suit against the Henrys based upon the Contract of Sale-the issue of clear title to the Ochses' property-had been "resolved" by the successful petition to the Dorchester County Council and resultant quitclaim deed to the thirty-foot wide strip of land to the Ochses. Id. at 543.

         As to the issue of attorney's fees, the Court of Special Appeals held that, despite its finding that there was a mutual mistake of fact that prevented the Contract of Sale from merging into the deed, "the circuit court was acting within the terms of the contract and deed by awarding attorney's fees, " because "[r]egardless of whether the contract merged with the deed, the attorney's fees provision of the contract survived." Id. at 544. But, the Court of Special Appeals felt that, in light of its holdings, the apportionment of legal fees to the Henrys was in error. Id. The intermediate appellate court explained that "at the time of the conveyance [of the 2890 Mowbray Creek Road property], the Henrys did not convey marketable title to the Ochses, breaching the [Contract of Sale]." Id. Therefore, the Court of Special Appeals vacated the attorney's fees award to the Henrys and remanded the case to the circuit court. Id.

         The Court of Special Appeals' holdings in Ochse 1 that the fee-shifting provision survived and the Henrys' had breached the Contract of Sale meant that the Ochses were the "prevailing party" in the litigation and, pursuant to the fee-shifting provision, entitled to "receive reasonable attorney's fees from the other party." See id. at 526 n.2 (noting that "[b]ecause the [Contract of Sale] contained an attorney's fees provision, the Ochses are entitled to attorney's fees, " and that even though the title issues had been resolved in favor of the Ochses through the county petition process, the circuit court "must view the case as it appeared when initiated" in issuing that award). Consequently, after the case was remanded to the circuit court, the Ochses filed, on January 24, 2012, a motion requesting attorney's fees to be awarded in the amount of $333, 354.00 for the attorney's fees incurred through the litigation to that point. Ochse 2, 216 Md.App. at 449. On April 27, 2012, the Ochses filed a supplemental motion for fees that reflected the additional costs incurred in their certiorari petition to this Court, [18] which revised the total to $355, 731.78. Id.

         On July 16, 2012, the circuit court issued an order and opinion granting attorney's fees to the Ochses. Id. The circuit court explained that, because the Ochses had "prevail[ed] on some issues in [the] case but [did] not prevail on other issues, " it had concluded that a "proportionate award" was appropriate. Id. at 453. Specifically, the circuit court noted that "the substantial majority of the time in trial and litigation effort put forth by [the Ochses] addressed the issue of willful fraud, " an issue on which they did not prevail in their appeal in Ochse 1. Id. at 453. The circuit court concluded that the appropriate "proportionate award" was "the entirety of the post-trial and appeal costs, as well as one-fourth of the attorney's fees expended in trial." Id. at 454. Therefore, starting from the Ochses' initial request of $333, 354.00, the circuit court deducted $114, 731.40 (its calculation of three fourths of the attorney's fees through the trial), as well as $2, 912.00 (which it determined to be a double entry in the Ochses' motion for fees), to reach an award of $215, 710.60. In its opinion and order, the circuit court made no mention of the Ochses' April 27, 2012 supplemental motion for fees. Id.

         The Ochses again appealed to the Court of Special Appeals-this time challenging the rationale of the circuit court's judgment concerning the award of attorney's fees. Id. at 449. The Court of Special Appeals rejected the Ochses' claim that they were entitled to the full amount of fees claimed pursuant to the "common core of facts" doctrine, under which a court may award "a fully compensatory fee where an attorney may not have prevailed on each and every claim or defense but still has achieved excellent results." Id. at 459. The intermediate appellate court noted that it had previously recognized that the "common core of facts" doctrine "comports with Maryland law, " but had not held that its application was mandatory. Id. at 467 (discussing Weichert Co. of Md. v. Faust, 191 Md.App. 1 (2010), aff'd on other grounds, 419 Md. 306 (2011)). The Court of Special Appeals noted that the circuit court "did not view the Ochses' first appellate victory as an excellent result" and held that the circuit court "was free to consider, " as part of its overall determination as to attorney's fees, "the thin relationship between the Ochses' appellate success and the thrust of their efforts at trial." Id. at 468-69. The Court of Special Appeals therefore held that the circuit court did not abuse its discretion in using its "proportionate award" approach to calculate attorney's fees instead of relying on the "common core of facts doctrine." Id. at 469. However, the Court of Special Appeals remanded the case for the circuit court to correct computational errors and to consider the Ochses' supplemental motion for fees, which the circuit court had overlooked. Id. On remand, the circuit court recalculated its award for attorney's fees and awarded a total of $228, 771.89 in attorney's fees to the Ochses.

         ESTC Litigation

         While the Henry litigation was still progressing through the courts, the Ochses filed a complaint against ESTC and Chicago Title on June 25, 2010 in the Circuit Court for Talbot County ("the trial court"). In that complaint, the Ochses alleged breach of contract against Chicago Title, and breach of contract, negligence, and negligent misrepresentation against ESTC, all stemming from the improper preparation of the Ochses' deed and failure to discover the 1919 deed. The Ochses subsequently ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.