Argued: October 6, 2016
Barbera, C.J., Greene, Adkins, McDonald, Watts, Getty,
Battaglia, Lynne A. (Senior Judge, Specially Assigned), JJ.
long and winding road that leads to your door Will never
disappear I've seen that road before
still they lead me back to the long winding road . . ."
Beatles, The Long & Winding Road (Apple Records
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
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 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
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.
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") 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
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.
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.
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
County Road Deed
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." Dorchester County thus acquired a fee
simple determinable interest in the strip of
land. 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."
of Pertinent Property Interests
the fourteen property owners was Henry B. Messenger, who held
title to approximately 150 acres of land in this vicinity
south of Federalsburg. 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
a thirty-five-acre parcel of the Messenger property was
conveyed on June 29, 1972 by Esther White
Messenger to R.T.R., Inc. On March 18, 1987, R.T.R.,
Inc. conveyed the same property by deed 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.
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. 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.
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."
Property Title Search
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
on the 2890 Mowbray Creek Road Property
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,  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]."
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.
of Ochses' Property Title Defect
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.
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
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.
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.
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.
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.
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 to be paid by the Ochses.
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. 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. Ochse 1, 202 Md.App.
at 525. Dorchester County was then dismissed from the Court
of Special Appeals case.
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. 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
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.
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,
which revised the total to $355, 731.78. Id.
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.
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.
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 ...