Case Title: 100 Investment Ltd. P'ship v. Columbia Town Ctr. Title

Citation: 

Docket Number: 19/12

State: maryland

Court: Maryland Supreme Court

Date: 2013-01-29T00:00:00Z

Document:
100 Investment Limited Partnership, et al. v. Columbia Town Center Title Company, et al.,
Case No. 19, Opinion by Greene, J. 
TORTS – NEGLIGENCE – DUTY OF CARE
In determining whether a tort duty should be recognized in a particular context, two major
considerations are: the nature of the harm likely to result from a failure to exercise due care;
and the relationship that exists between the parties.  Where the failure to exercise due care
creates a risk of economic loss only, we require an intimate nexus between the parties as a
condition to the imposition of tort liability.  This intimate nexus is satisfied by contractual
privity or its equivalent.  A title company that conducts a title search and supplies the
information in a title commitment has a duty to exercise reasonable care in the conduct of
that transaction to its customer or others with whom it shares contractual privity or its
equivalent.
CONTRACTS – EXCULPATORY CLAUSES
Consistent with the public policy rationale of freedom to contract, a party to a contract can
ordinarily exempt himself from liability for harm caused by his failure to observe the
standard of reasonable care.  Courts will enforce a contract with such exculpatory language
when it is evident that the parties intended to limit claims sounding in negligence.  Courts
will not enforce an exculpatory clause, however, when it excuses liability for intentional
torts, is a product of grossly unequal bargaining power, is void as against public policy, or
when legislation proscribes such clauses. 
IN THE COURT OF APPEALS
OF MARYLAND
No. 19
September Term, 2012
100 INVESTMENT LIMITED PARTNERSHIP, ET
AL.
v.
COLUMBIA TOWN CENTER TITLE COMPANY,
ET AL.
Bell, C.J.
Harrell
Battaglia
Greene
Barbera
McDonald
Cathell, Dale R. (Retired, Specially
      
 Assigned),
               
  JJ.
Opinion by Greene, J.
Filed:    January 29, 2013
This case has its roots in a real estate transaction that occurred over twenty-five years
ago.  In 1982, two elderly widows (“the Millers”) sold a tract of land in Howard County to
one party, and then, four years later, purported to sell the same tract of land to Petitioner (100
Investment Limited Partnership, or, “the Partnership”).  The Partnership engaged two title
companies, Cambridge Title Company (“Cambridge”) and Columbia Town Center Title
Company (“Columbia”) (collectively, “the Title Companies,” or “Respondent”) to complete
the title work.  The Title Companies, however, failed to locate and report the Millers’ first
land sale.  Chicago Title Insurance Company (“Chicago Title,” or “Respondent”) underwrote
the insurance policies on the tract of land at issue.  These transactions have spawned a
complex line of facts and numerous lawsuits that will be detailed infra. 
We are asked to determine whether a title company owes a duty of care, in tort, when
conducting a title search.  As an extension of this question, we are also asked whether a title
insurance company may be held vicariously liable as a result of the Title Companies’
negligent title search.  In this case, we do not review a title company’s or a title insurance
company’s contractual obligations.
We shall hold that the Title Companies owed a duty of care to their customer, the
Partnership, in conducting the title search and issuing the title commitment.  Additionally,
we conclude that, under the circumstances, Chicago Title may not be held vicariously liable
for the Title Companies’ negligence.
I. 
On August 24, 1982, Francis L. Miller and Mildred C. Miller (“the Millers”)
conveyed a 1.144-acre tract of land in Howard County to Ahsan S. Khan, as Trustee for
1 A title company is defined as “[a] company that examines real-estate titles for any
encumbrances, claims, or other flaws, and issues title insurance,” usually on behalf of the
title insurance company.  Black’s Law Dictionary 299 (8th ed. 2004).  See generally Barlow
Burke, Law of Title Insurance § 1.02[C] (3d ed. Supp. 2012).
2 Both parties define differently the extent of the terms of the agreement between the
Title Companies and the Partnership.  Although the specific contract is not in the record, the
parties agree that the Title Companies “were engaged to do the title work” for the two sales
of the disputed tract.  Additionally, as noted by the intermediate appellate court, “neither the
Title Companies nor the Partnership contest the existence of a contractual relationship . . .
.”  Columbia Town Ctr. Title Co. v. 100 Inv. Ltd. P’ship, 203 Md. App. 61, 82, 36 A.3d 985,
997 (2012).
3 A title commitment for title insurance, often called a title binder, “contain[s]
statements that purchasers and their attorneys use as title information.”  James Bruce Davis,
More Than They Bargained For: Are Title Insurance Companies Liable in Tort for
Undisclosed Title Defects?, 45 Cath. U. L. Rev. 71, 76-77 (1995).  The commitment is
typically issued by a Title Company or a Title Insurance Company before the close of the
land sale and before the insurance policy is issued. The information contained in a title
commitment will be detailed at length later in this opinion. 
4 Title insurance has been defined as “a risk management tool that . . . protect[s]
against loss caused by the state of title or the priority of a mortgage being other than as
described in the policy . . . [if the policy’s] . . . description is inaccurate and the insured
(continued...)
2
Ahsan S. Khan, M.D., P.A., Profit Sharing Plan (“Dr. Khan”).  The deed was properly
recorded among the land records for Howard County. 
On October 14, 1986, however, the Millers purported to sell the same 1.144-acres of
land (“the disputed tract”) to the Partnership.  The sale included the disputed tract as part of
a larger sale of a 49.845-acre tract of land.  Cambridge Title Company1 “was engaged to do
the title work”2 for this transaction.  The Partnership also hired Dewberry & Davis, LLC
(“Dewberry”) to survey the land for the potential sale.  There does not appear to be any
genuine dispute that Cambridge issued a title commitment3 and later an insurance policy4 to
4(...continued)
suffers a loss as a result of that inaccuracy, the policy covers that loss subject to the various
provisions of the policy.”  5 Steven A. Freeman, et al., Appleman on Insurance § 54-01 [1][a]
(2012).  The insured typically pays a premium for the title insurance policy coverage, and
the price is based on the level of risk, level of coverage, and maximum payout.  See
Columbia Town Ctr. Title Co., 203 Md. App. at 73, 36 A.3d at 992.  The predominant view
is that a title insurance policy serves to indemnify the insured against loss or defects, and is
not a contract of guaranty or warranty.  See Stewart Title Guar. Co. v. West, 110 Md. App.
114, 128, 676 A.2d 953, 960 (1996) (citations omitted); see also Md. Code (1995, 2011 Repl.
Vol.), § 1-101(qq) of the Insurance Article (defining title insurance as “insurance of owners
of property or other persons that have an interest in the property against loss by
encumbrance, defective title, invalidity of title, or adverse claim to title”).
5 A title insurance company underwrites the title insurance policy.  The insurance
company generally issues the policy after the commitment is issued, the closing is complete,
the purchase price is paid, and the deed to the land is obtained by the purchaser.  See Davis,
More Than They Bargained For, 45 Cath. U. L. Rev. at 76-77.
6 The record contains the insurance policy issued by Columbia for the Partnership and
underwritten by Safeco for the second transaction, but does not contain the insurance policy
issued by Cambridge for the Partnership and underwritten by Chicago Title.  In the trial
court, however, the Partnership conceded that “[the Partnership], in the October transaction,
engaged Cambridge Title Company . . . to handle the closing, to do a title search, to get a title
commitment, and get a policy of title insurance.” (emphasis added).  The intermediate
appellate court also noted that “in conjunction with [the October] purchase, Cambridge
issued a policy to the Partnership, underwritten by Chicago Title . . . .”  Columbia Town Ctr.
Title Co., 203 Md. App. at 68, 36 A.3d at 989.  Like the intermediate appellate court, we will
assume that the policies are substantially similar “because title insurance policies are fairly
standardized throughout the industry.”  Columbia Town Ctr. Title Co., 203 Md. App. at 100
n. 17, 36 A.3d at 1007 n. 17 (citing Davis, More Than They Bargained For, 45 Cath. U. L.
Rev. at 77). 
3
the Partnership underwritten by Chicago Title,5 pursuant to an agency agreement between
Cambridge and Chicago Title.6  The commitment did not report the previous sale to Dr.
Khan.  Cambridge has since gone out of business. 
On December 18, 1986, there was a transfer of ownership interests in the Partnership.
The original owners transferred their ownership interest in the Partnership to Petitioners
4
Coscan/Adler Limited Partnership (formerly “Costain/Adler Limited Partnership”) and Brit-
Am II Limited Partnership.  Columbia “was engaged to do the title work” for the December
transaction.  Columbia issued a title commitment to the Partnership and later issued an
insurance policy underwritten by Safeco Title Insurance Corporation (“Safeco”).  Columbia
failed to report the earlier sale to Dr. Khan in the commitment or the policy.  After that
transaction, Chicago Title acquired Safeco.  As such, Chicago Title assumed Safeco’s
liabilities and is, therefore, responsible for Safeco title insurance policies. 
In 1994, for the purpose of residential development, the Partnership subdivided the
land it had purchased from the Millers, including the disputed tract.  The Partnership
subsequently executed and recorded a Declaration of Covenants, Easements, Charges, and
Liens in connection with the residential development in Howard County.  The Partnership
purportedly dedicated a portion of the disputed tract as a public utility easement. 
Thereafter, the Partnership purportedly conveyed to N.V.R. Homes, Inc. (“NVR”) a
portion of the disputed tract as part of five townhouse lots.  These lots were later improved
and conveyed to individual homeowners.  On August 30, 1995, the Partnership purportedly
conveyed the remainder of the disputed tract, as part of a larger conveyance to The
Lyndwood Association, Inc., a homeowner’s association, to be used for common area open
space and landscaping. 
It was not until July 26, 2001, that the Partnership learned of the previous sale of the
disputed tract from the Millers to Dr. Khan.  The Partnership only discovered this
information after Dr. Khan agreed to sell a large tract of land, including the disputed tract to
7 Prior to the present action filed in the Circuit Court for Howard County, the parties
instituted litigation in both state and federal courts.  In 2002, Dr. Khan filed, in the District
Court of Maryland, sitting in Howard County, a complaint against the Partnership for
trespass.  Ahsan S. Khan v. 100 Inv. Ltd. P’ship, Case No. 100100013442002.  The District
Court entered judgment in favor of Dr. Khan and awarded him nominal damages. 
NVR also filed a suit against the Partnership in the Circuit Court for Howard County
alleging that the Partnership conveyed defective title.  NVR, Inc. v. 100 Inv. Ltd. P’ship, Case
No. 13-C-02-052503 OC. This case was quickly resolved, however, because once the
Partnership repurchased the disputed tract, the doctrine of after-acquired title retroactively
cured all title defects, including the public utility easement and the deeds to NVR and
Lyndwood as of the original date of the conveyances.  Petitioner’s Brief at 8.
On April 5, 2002, Chicago Title filed suit against the Partnership, in the United States
District Court for the District of Maryland, seeking declaratory judgment.  Chicago Title Ins.
(continued...)
5
100-103 Center, LLC, and Courtyards at Timbers, LLC, (collectively, “Timbers”) and
Timbers hired a surveyor.  The surveyor discovered townhouses located on a portion of the
land that Timbers intended to purchase from Dr. Khan.  Timbers contacted the Partnership
and notified it of the impending sale, scheduled to take place within the week. 
To cure the title defect, the Partnership offered to repurchase the disputed tract from
Timbers after Timbers purchased the land from Dr. Khan.  Thereafter, the Partnership
repurchased the disputed tract from Timbers at the fair market value that Timbers had paid
per acre to Dr. Khan, amounting to $175,348.56.  The Partnership incurred additional
expenses with regard to the transaction, including costs and attorneys fees bringing the total
cost to $191,510.88. 
On April 7, 2004, the Partnership filed a complaint in the Circuit Court for Howard
County against Cambridge, Columbia, Chicago Title, Dewberry, and Francis L. Miller, the
surviving grantor of the disputed tract.7  The Partnership alleged claims for negligence
7(...continued)
Co. v. 100 Inv. Ltd. P’ship, No. JFM-02-CV-1138 (D. Md. 2002).  In its complaint, Chicago
Title asked the court to determine its responsibilities under the insurance policy issued in
December, 1986, with respect to the Partnership’s repurchase of the disputed tract.  The
federal district trial court granted summary judgment in favor of the Partnership, awarding
it $201,744.37 in damages for its repurchase of the disputed tract and for the costs associated
with the Khan litigation.
 
Chicago Title appealed that judgment to the United States Court of Appeals for the
Fourth Circuit.  The federal appellate court, in Chicago Title Ins. Co. v. 100 Inv. Ltd. P’ship,
355 F.3d 759 (4th Cir. 2004), affirmed in part and reversed in part the judgment of the
federal trial court.  The Fourth Circuit reversed the determination that Chicago Title owed
damages and attorneys fees to the Partnership for repurchasing the parcel.  Chicago Title Ins.
Co., 355 F.3d at 761.  The Fourth Circuit explained that once the Partnership conveyed the
land, Chicago Title was no longer contractually liable to it.  Chicago Title Ins. Co., 355 F.3d
at 765.  The Fourth Circuit affirmed the trial court’s judgment with regard to defending and
paying damages for the trespass action because even though the trespass action occurred after
the policy period, the damage was sustained during the policy period.  Chicago Title Ins. Co.,
355 F.3d at 765-66.
Res judicata does not bar the present suit because the negligence claim was dismissed
without prejudice prior to final judgment in the Federal Court.  Cf. 100 Inv. Ltd. P’ship v.
Columbia Town Ctr. Title Co., Sept. Term 2005, No. 2214 (Md. Ct. Spec. App. Mar. 8, 2007)
(noting that “[the Title Companies] appropriately do not contend that the doctrine of res
judicata applies . . . ”).  Collateral estoppel was alleged in the state court proceedings and
will be discussed, infra. 
8 The Partnership later submitted an amended complaint that added a breach of
contract claim against Columbia.  The amended complaint also contained the original
negligence claim against Cambridge.
6
against (1) Cambridge and Columbia in performing the title search and failing to discover
and report the Khan deed, (2) Dewberry for its negligent performance of the land survey, and
(3) Chicago Title under a theory of vicarious liability for the Title Companies’ negligent  title
search.8  The Title Companies and Chicago Title responded to the complaint and filed a
motion for summary judgment.  They alleged collateral estoppel, claiming that the action was
barred because the factual issues had been resolved in the Fourth Circuit, and that the
9 According to the parties, the suit against Dewberry was dismissed after facts
uncovered during discovery indicated that Dewberry did not breach its standard of care.
Furthermore, the trial court entered judgment against Francis L. Miller in favor of the
Partnership with regard to the covenants of warranty included in her deed to the Partnership.
100 Inv. Ltd. P’ship v. Columbia Town Ctr. Title Co., Case No. 13-C-04-058302 OC. 
7
Partnership could not prove that its damages were proximately caused by the Title
Companies’ negligent title search.  The trial court granted summary judgment in favor of the
Title Companies and Chicago Title,9 concluding that collateral estoppel barred the action and
that the Partnership could not show that its damages were proximately caused by the Title
Companies’ search.
The Partnership appealed to the Court of Special Appeals.  The intermediate appellate
court, in an unreported opinion, reversed the trial court’s determinations and remanded the
case to the trial court to determine factually whether any negligence by the Title Companies
was the proximate cause of the Partnership’s damages.  The intermediate appellate court held
that the action was not barred by collateral estoppel because the federal litigation sounded
in contract and dealt with the title policy and the extent of its coverage, whereas the present
complaint sounded in tort. 
After remand, a bench trial was held in the Circuit Court for Howard County, and on
May 11, 2009, the court issued a memorandum opinion, ruling in favor of the Partnership.
The court determined that the Title Companies were engaged “to perform all the duties
expected of a title company in connection with the purchase of land in a commercial real
estate transaction.”  This undertaking required that the title examiner use “a reasonable
8
degree of skill and diligence [in examining title].”  Corcoran v. Abstract & Title Co. of Md.,
Inc., 217 Md. 633, 637, 143 A.2d 808, 810 (1958).  Based on the evidence adduced at trial,
the court found that the Title Companies breached this duty.  Furthermore, the court
maintained that the Title Companies “would have known” that the Partnership would rely
on their title search.  According to the trial judge, the negligent title search was a proximate
cause of the Partnership’s losses.  As such, the court determined that the Title Companies
were liable in tort to the Partnership.  Additionally, the court held that Chicago Title was
vicariously liable for the Title Companies’ negligence under the doctrine of respondeat
superior because Chicago Title “exerted a lot of control over its local agents,” as gleaned
from the parties’ contracts and testimony in the trial court proceedings.  The trial court
awarded the Partnership $191,510.88. 
The Title Companies and Chicago Title appealed to the Court of Special Appeals.
The intermediate appellate court held that the Title Companies owed no duty in tort to the
Partnership on the basis of the title search.  Columbia Town Ctr. Title Co. v. 100 Inv. Ltd.
P’ship, 203 Md. App. 61, 82, 36 A.3d 985, 997 (2012).  In reaching this result, the court
emphasized that the General Assembly has neither imposed nor given any indication of an
intent to impose a tort duty on title companies.  Columbia Town Ctr. Title Co., 203 Md. App.
at 83-86, 36 A.3d at 998-1000.  The court also distinguished the role of a title searcher from
other professionals, such as attorneys, who have been found to owe a duty in tort, concluding
that title searchers’ licensing requirements do not focus on “ensuring proficiency in the
search and examination of title,” and that their work does not require professional judgment
9
to the same extent as attorneys and other professionals.  Id.
Furthermore, the court held that Chicago Title could not be vicariously liable in tort
for the Title Companies’ negligence given the insurance company’s role as an indemnifier,
not a guarantor, of title.  Columbia Town Ctr. Title Co., 203 Md. App. at 91, 103, 36 A.3d
at 1002-03, 1009-10.  The court explained that if a title insurance company could be liable
in tort, it would be deprived of its option to cure or pay for covered losses as specified in the
insurance policy.  Columbia Town Ctr. Title Co., 203 Md. App. at 91, 36 A.3d at 1002.  The
court noted that the scope of Chicago Title’s agency relationship with the Title Companies
did not extend to undertaking a title search for the benefit of the insured.  Columbia Town
Ctr. Title Co., 203 Md. App. at 98-99, 36 A.3d at 1006-07.  In addition, the court reasoned
that the insurance policy between Chicago Title and the Partnership contained a limited
liability provision that restricted any action against the insurance company in negligence to
the insurance contract.  Columbia Town Ctr. Title Co., 203 Md. App. at 102, 36 A.3d at
1009.
In a dissenting opinion authored by Judge Meredith, he concluded that the Title
Companies owed a duty in tort to the Partnership.  Columbia Town Ctr. Title Co., 203 Md.
App. at 104, 36 A.3d at 1010 (Meredith, J., dissenting).  Judge Meredith explained that
“[w]hen a contract purchaser of real property engages a title company to conduct settlement
on the contract . . . the typical purchaser of real estate expects, at a minimum, that the title
company will (1) confirm that the seller holds good and marketable title, and (2) prepare a
deed that transfers good and marketable title to the purchaser.”  Id.  The purchaser relies on
10
this information to decide whether to go to closing.  Id.  According to the dissent, Maryland
law provides that a claim against a title company may be asserted in negligence.  Columbia
Town Ctr. Title Co., 203 Md. App. at 105, 36 A.3d at 1010.  To support this conclusion,
Judge Meredith compared the role of the title searcher to that of professionals who have been
found to owe a duty in tort.  Columbia Town Ctr. Title Co., 203 Md. App. at 105-07, 36 A.3d
at 1010-12. 
Subsequently, the Partnership asked that we review the case.  We granted certiorari
in 100 Inv. Ltd. P’ship v. Columbia Town Ctr. Title Co., 426 Md. 427, 44 A.3d 421 (2012),
to answer the following questions:
1. Did the Court of Special Appeals err by holding that the principles of
Jacques v. First National Bank of Maryland, 307 Md. 527, 515 A.2d 756
(1986) did not apply to title companies in general and therefore that the
Title Companies did not owe a tort duty of care to the Partnership in
conducting a title search for the benefit of the Partnership?
2. Did the Court of Special Appeals err by holding that Chicago Title
was not vicariously liable for the negligence of the Title Companies, who
were its agents?
II.
The issue before us is whether there was a duty imposed on the Title Companies in
tort.  We are asked first to discern, therefore, whether a title company may owe a tort duty
of care for a title search, and whether the Title Companies in the present case owed a duty
of reasonable care to the Partnership in conducting a title search.
Whether a legal duty exists between parties is a question of law to be decided by the
court.  See Pace v. State, 425 Md. 145, 154, 38 A.3d 418, 423 (2012) (citing Valentine v. On
11
Target, Inc., 353 Md. 544, 549, 727 A.2d 947, 949 (1999)).  We review the trial court’s legal
determinations for legal correctness.  See Walter v. Gunter, 367 Md. 386, 392, 788 A.2d 609,
612 (2002) (citations omitted) (“[O]ur Court must determine whether the lower court’s
conclusions are ‘legally correct’ . . . .”). 
The Partnership contends that the Title Companies owed a duty to exercise reasonable
care in searching the title to the property conveyed by the Millers to the Partnership.  Further,
the Partnership maintains that under Jacques v. First Nat’l Bank of Md., 307 Md. 527, 515
A.2d 756, 883 (1986) and its progeny, a tort duty of care arises independently as a matter of
public policy, and in economic loss cases, a duty is imposed when there is an “intimate
nexus” between the parties.  In other words, according to the Partnership, because it engaged
the Title Companies to conduct a title search, which “went to the core of the[ir] relationship,”
and it was foreseeable to the Title Companies that the Partnership would rely on the accuracy
of the title search to close on the land contract, the relationship was such that the parties
shared an “intimate nexus.”  The Partnership also highlights the importance of the
information supplied by title companies to their customers, comparing the title examiner’s
work to that of doctors, lawyers, accountants, architects, and other professionals that have
been found to owe a duty in tort. 
In response, the Title Companies contend that the relationship between the Title
Companies and the Partnership was contractual in nature, and, as such, a tort duty should not
be imposed.  Furthermore, according to the Title Companies, the relationship between the
parties was limited in nature; the Partnership contracted with the Title Companies to issue
12
title binders and title insurance policies, not to provide title opinions.  This limited
relationship, the Title Companies maintain, cannot be construed as an “intimate nexus” to
warrant tort liability, as there was no expectation or reliance on behalf of the Partnership on
the information contained in the title commitments or policies.  The Title Companies also
argue that public policy does not warrant a tort duty of care.  For example, the legislature has
yet to establish liability, in tort, for title companies.  Additionally, the Title Companies
contrast their duties with those of industry professionals where this Court has established an
additional tort duty of care.  See Jacques, 307 Md. at 541, 515 A.2d at 763 (citations omitted)
(noting that the “law generally recognizes a tort duty of care arising from contractual
dealings with professionals such as physicians, attorneys, architects, and public accountants
. . . [and] we have recognized that in those occupations requiring peculiar skill, a tort duty
to act with reasonable care will be imposed on those who hold themselves out as possessing
the requisite skill”).
“It is a settled and ‘familiar proposition that not every duty assumed by contract will
sustain an action sounding in tort.’”  Mesmer v. Md. Auto. Ins. Fund, 353 Md. 241, 252, 725
A.2d 1053, 1058 (1999) (citing Council of Co-Owners Atlantis Condo., Inc. v. Whiting-
Turner Contracting Co., 308 Md. 18, 32, 517 A.2d 336, 343 (1986)); see also U.S. Gypsum
Co. v. Mayor of Balt., 336 Md. 145, 156, 647 A.2d 405, 410 (1994); Decoster v.
Westinghouse Elec. Corp., 333 Md. 245, 250-51, 634 A.2d 1330, 1332-33 (1994) (citations
omitted); Jacques, 307 Md. at 534, 515 A.2d at 759.  There are situations, however, when
responsibilities imposed by a contractual relationship are supplemented with tort duties.  See
13
Jacques, 307 Md. at 534, 515 A.2d at 759 (citing Slacum v. Trust Co., 163 Md. 350, 352-53,
163 A. 119, 120 (1932)).  Our law is well-established that to assert a claim in negligence, the
plaintiff must prove: “(1) that the defendant was under a duty to protect the plaintiff from
injury, (2) that the defendant breached that duty, (3) that the plaintiff suffered actual injury
or loss, and (4) that the loss or injury proximately resulted from the defendant’s breach of the
duty.”  Lloyd v. Gen. Motors Corp., 397 Md. 108, 131-32, 916 A.2d 257, 270-71 (2007)
(emphasis added) (quoting Valentine, 353 Md. at 549, 727 A.2d at 949).
We have adopted Prosser and Keeton’s characterization of “duty” as “an obligation,
to which the law will give recognition and effect, to conform to a particular standard of
conduct toward one another.”  See Blondell v. Littlepage, 413 Md. 96, 120, 991 A.2d 80, 94
(2010) (quoting W. Page Keeton, et al., Prosser and Keeton on The Law of Torts § 53 (5th
ed. 1984)).  Thus, in determining whether “an actionable duty exists represents a policy
question of whether the specific plaintiff is entitled to protection from the acts of the
defendant.”  Blondell, 413 Md. at 120, 991 A.2d at 94; see also Pendleton v. State, 398 Md.
447, 461, 921 A.2d 196, 204-05 (2007) (citations omitted).
In Maryland, to impose a tort duty on title examiners is not a novel idea.  We have
recognized that “[o]ne who undertakes to examine a title for compensation is bound to
exercise a reasonable degree of skill and diligence in the conduct of the transaction.”
Corcoran v. Abstract & Title Co. of Md., Inc., 217 Md. 633, 637, 143 A.2d 808, 810 (1958).
We explained that although liability for a faulty title search in reality rests upon the
contractual relationship between the title searcher and the customer, it is also “ordinarily
14
enforced by an action . . . for negligence in the discharge of [the title examiner’s]
professional duties . . . .”  Corcoran, 217 Md. at 637, 143 A.2d at 810 (citing Watson v.
Calvert Bldg. Ass’n, 91 Md. 25, 33, 45 A. 879, 881 (1900)); accord Stone v. Chicago Title
Ins. Co., 330 Md. 329, 335-36, 624 A.2d 496, 499-500 (1993).  
To determine whether a tort duty exists in a particular context, we examine: (1) “the
nature of the harm likely to result from a failure to exercise due care,” and (2) “the
relationship that exists between the parties.”  Jacques, 307 Md. at 534, 515 A.2d at 759.  As
we explained further in Jacques:
Where the failure to exercise due care creates a risk of economic loss
only, courts have generally required an intimate nexus between the
parties as a condition to the imposition of tort liability.  This intimate
nexus is satisfied by contractual privity or its equivalent.  By contrast,
where the risk created is one of personal injury, no such direct
relationship need be shown, and the principal determinant of duty
becomes foreseeability.
Jacques, 307 Md. at 534-35, 515 A.2d at 759-60 (citations omitted). 
We have, on numerous occasions, considered when an “intimate nexus” is present
between parties such that a duty in tort exists in a case of economic injury.  See Blondell, 413
Md. at 122, 991 A.2d at 95 (discussing whether an intimate nexus existed between two
attorneys to support the existence of a duty to warrant economic damages); Chicago Title Ins.
Co. v. Allfirst Bank, 394 Md. 270, 296, 905 A.2d 366, 381 (2006) (analyzing whether an
intimate nexus existed between a bank and a non-customer drawer of a check in a tort action
where only economic loss resulted); Jacques, 307 Md. at 534-35, 515 A.2d at 759-60 (1986)
15
(assessing whether an intimate nexus existed between a bank and its customer).  
In Jacques, we were asked to determine whether a bank that undertook to process and
make a determination on a loan application owed its customer a duty of care in the
processing of the application.  Jacques, 307 Md. at 528, 515 A.2d at 756.  We highlighted
two cases from the Court of Appeals of New York to delineate the line between relationships
that do and do not warrant tort liability when damages are economic.  The first case cited was
Glanzer v. Shepard, 135 N.E. 275 (N.Y. 1922), a case where the plaintiff, a bean consumer,
sued a defendant bean weigher for negligent bean weighing.  The contractual relationship,
however, was between the bean weigher and a third party seller of beans.  Judge Cardozo,
writing for the Court, held that as the buyer was the known and intended beneficiary of the
agreement, the weigher was on notice that the buyer would rely on the information the
weigher provided, namely, the bean weight, in completing his purchase.  Furthermore,
because the reliance on the information supplied by the bean weigher was the end aim of the
transaction (and the inducement to purchase), there was a close enough relationship between
parties to hold the bean weigher liable in tort to the buyer.  Glanzer, 135 N.E. at 275-77.  
We contrasted Glanzer with Ultramares Corp. v. Touche, 174 N.E. 441 (N.Y. 1931),
where the Court of Appeals of New York refused to find liability in tort because the
relationship between a negligent accountant and a third party relying on the balance sheet
prepared by the accountant for a corporation was too attenuated.  The Ultramares court
stressed that because the third party was part of an “indeterminate class of persons,” there
was no privity or close enough relationship to hold the accountant liable for negligence to
16
the third party.  Ultramares, 174 N.E. at 445-47. 
The Jacques Court then applied a similar  relationship analysis  to its facts.  The Court
noted that when the bank agreed to process and make a determination on the loan application,
the Bank knew that the customer was “particularly vulnerable and dependent upon the
Bank’s exercise of due care[,]” as the bank was aware that the customer would be obligated
to forfeit its housing deposit or proceed to settlement with the loan in light of the bank’s
determination.  Jacques, 307 Md. at 540-41, 515 A.2d at 762-63.  Therefore, the bank had
a duty to process the application with reasonable care given the bank’s relationship with its
customer and the bank’s knowledge of the customer’s reliance on the bank’s services.  
The Jacques Court also considered an additional factor relevant to the determination
of whether to recognize a tort duty: the “nature of the business of the party upon whom the
burden is sought to be imposed.”  Jacques, 307 Md. at 541, 515 A.2d at 763.  We explained:
The law generally recognizes a tort duty of care arising from contractual
dealings with professionals such as physicians, attorneys, architects, and
public accountants.  Additionally, we have recognized that in those
occupations requiring peculiar skill, a tort duty to act with reasonable
care will be imposed on those who hold themselves out as possessing the
requisite skill.
Jacques, 307 Md. at 541, 515 A.2d at 763 (citations omitted).  As banks have traditionally
“been held to a high degree of integrity and responsiveness to their public calling[,]” we held
that the plaintiff must show that the defendant “failed to exercise that degree of care which
a reasonably prudent bank would have exercised under the same or similar circumstances.”
10 We further noted that, “[a]s in any other negligence case, an industry standard, if
it exists, may be proven as evidence of the applicable standard of care.”  Jacques v. First
Nat’l Bank of Md., 307 Md. 527, 544, 515 A.2d 756, 764 (1986). 
11 We also discussed Credit Alliance Corp. v. Arthur Andersen & Co., 483 N.E.2d
110, 118 (N.Y. 1985), a case decided by the Court of Appeals of New York.  We explained
that Credit Alliance “clarified the ambiguity surrounding the nature of the relationship
between the plaintiff and the defendant sufficient to constitute the required nexus that
approaches privity . . . .”  Walpert, Smullian, & Blumenthal, P.A. v Katz, 361 Md. 645, 690,
762 A.2d 582, 606 (2000).  Credit Alliance, which also dealt with imposing tort liability on
accountants, noted that the plaintiff must show that “(1) the accountants must have been
aware that the financial reports [they prepared] were to be used for a particular purpose or
purposes; (2) in the furtherance of which a known party . . . was intended to rely; and (3)
there must have been some conduct on the part of the accountants . . . which evinces the
accountants’ understanding of that party[’s] . . . reliance.”  Credit Alliance, 483 N.E.2d at
118. 
17
Jacques, 307 Md. at 541-44, 515 A.2d at 763-64.10 
We were again asked whether privity or its equivalent existed between parties to
warrant tort liability in Walpert, Smullian & Blumenthal, P.A. v. Katz, 361 Md. 645, 762
A.2d 582 (2000).  In Walpert, an accounting firm contracted with a business to prepare a
financial report.  The firm prepared the report in a negligent manner and a third party relied
on the report, suffering economic damages.  The Court discussed the variety of approaches
to finding duty or lack thereof.  Walpert, 361 Md. at 657-92, 762 A.2d at 588-607.  In
applying the privity standard enunciated in Jacques and Ultramares, the Court looked for an
intimate nexus between the parties.11  Focusing on the accountant’s knowledge of the third
party’s reliance on the accountant’s report, we concluded that the accountant’s knowledge
could suffice as the legal equivalent of privity necessary to establish a negligence claim
12 The Walpert Court applied the Credit Alliance analysis to hold that a reasonable
jury could find that the accounting firm had knowledge that the third party relied on its
financial report.  First, there was evidence that the accounting firm was aware the report
would be used for a particular purpose, i.e., to help the third party decide whether to make
a loan.  Second, there was evidence that the accounting firm knew that the third party would
rely on the report because the third party informed the accounting representative of that fact.
Finally, the “linking conduct” included a meeting between the parties, and a copy of the
financial report, prepared to allow the third party to determine whether to make a business
decision in reliance on the accounting firm’s report.  Walpert, 361 Md. at 694, 762 A.2d at
608-09.
13 With regard to finding privity between parties, the intermediate appellate court has
explained that
[i]f the intimate nexus exists through contractual privity or its equivalent,
whether the activity undertaken is part of a contractual obligation,
express or implied in fact, or is undertaken gratuitously, the activity must
be closely connected with and arise out of the nexus between the parties.
In addition, to impose a tort duty, there must be reasonable reliance by
the aggrieved party, a risk of loss, and knowledge by the defendant of
both the reliance and the risk of loss. 
(continued...)
18
between the parties.12  Walpert, 361 Md. at 684-88, 692-94, 762 A.2d at 603-05, 607-09.
The Court of Special Appeals has also analyzed when an “intimate nexus” might exist
between parties.  See Champion Billiards Cafe, Inc. v. Hall, 112 Md. App. 560, 569-71, 685
A.2d 901, 906 (1996) (noting the existence of an “intimate nexus” between employer and
employee, and that the service offered by employer to forward an insurance application and
withhold premiums was “a type of service ordinarily provided to an employee by an
employer,” that the employer undertook the task knowing that the employee relied on the
employer to do so, and that the “failure to forward the application would result in a lack of
coverage”)13; Chew v. Meyer, 72 Md. App. 132, 141-42, 527 A.2d 828, 832-33 (1987)
13(...continued)
Champion Billiards Café, Inc. v. Hall, 112 Md. App. 560, 570-71, 685 A.2d 901, 906 (1996).
19
(highlighting the “intimate nexus” between a doctor and his patient to support a tort claim
for negligent handling of an insurance form based on the parties’ contractual relationship, the
patient’s reliance, the risk of harm, and the doctor’s knowledge of both the reliance and the
risk). 
We explained in Walpert that “the rationale underlying the requirement of privity or
its equivalent as a condition of liability for negligent conduct . . . resulting in economic
damages . . . [is] to avoid ‘liability in an indeterminate amount for an indeterminate time to
an indeterminate class.’”  Walpert, 361 Md. at 671, 762 A.2d at 596 (quoting Ultramares,
174 N.E. at 444).  A defendant can protect itself from such unpredictable and unlimited
liability in cases where there is a close nexus between the parties.  Such a relationship might
stem from a defendant’s knowledge of the plaintiff’s identity, the class in which a plaintiff
belongs, and the defendant’s knowledge that the prospective plaintiff may be relying on the
information provided by a defendant.  Walpert, 361 Md. at 671, 687, 762 A.2d at 596, 605
(citing Glanzer, 135 N.E. at 275-76).
This rationale helps explain why we did not find tort liability in Blondell v. Littlepage,
413 Md. at 101, 991 A.2d at 83.  In Blondell, we considered whether an attorney, William
Blondell, could sue another attorney, Diane Littlepage, for negligent consultation,
communication, and disclosure, even though there was a shared fee agreement between the
20
parties governing the duties owed one another.  We held that any duty owed by Littlepage
to Blondell was “circumscribed by the fee sharing agreement,” which “directly contradict[ed]
the existence of th[e] duties.”  Blondell, 413 Md. at 122-23, 991 A.2d at 96.  Through the fee
sharing agreement, Blondell “had conceded at the inception any necessity of consultation and
its attendant communication between him and Littlepage.”  Id.  This, therefore, is a situation
where the defendant excluded itself from liability such that the plaintiff was on notice not to
rely on the defendant.  The expectation by the parties involved, therefore, was essentially that
no duty was owed.  This case differs from the others where privity and an “intimate nexus”
was found as a result of the expectation and knowledge of reliance by the plaintiff.
In the instant case, we concern ourselves with whether there existed an “intimate
nexus” between the Partnership and the Title Companies to warrant a duty to exercise due
care in conducting the title search.  We examine the relationship between the parties, to see
if there is contractual privity or its equivalent. 
Although the parties disagree as to the nature and scope of their relationship, the Title
Companies and the Partnership agree that the Title Companies were engaged to do the “title
work” for the two land sales.  Part of the title work included the issuance of the title binders
by the title company on behalf of the insurance company to the prospective buyer before
closing.  These title binders were issued as part of the title commitment.
According to Michael Schleupner, who testified during a deposition as Chicago Title’s
corporate designee, a title commitment is issued by the title agent, and is
also known as a binder . . . used in the personalized insurance business
21
. . . issued prior to the closing and it says if a closing takes place, if
money is to be lent by a lender, if the consideration of the purchase of a
property is to be offered to the right parties[,] [the insurance company]
stand[s] ready, willing and able to ensure the title under the following
circumstances and it’s divided into three parts.
   
There’s Schedule A, Schedule B-1, and Schedule B-2. Schedule
A says who the potential insured will be and identifies who is currently
in title.  It lists the amount of the policy to be issued.  It describes the
property to be insured. 
Schedule B-1 [lists] requirements . . . if there are existing liens on
the property the requirements would be they have to be paid.  If there are
taxes on the property that are open taxes they have to be paid.  It also
identifies the instruments that have to be recorded for the company to
insure the title as set forth in Schedule A . . . . 
Schedule B-2 contains those exceptions to title both preprinted .
. . generally survey matters and things and also those discovered in the
course of examining the title or the land records, you know, pole line
agreements, easements, restrictions, covenants and things of that sort,
matters set forth on recorded subdivision plats.
Basically the company is committing itself to ensure . . . this title
for this amount of money if you pay us a premium of[] X but our policy
will contain exceptions to coverage A,B,C,D,E,F,G.
The significance of the information contained in the title commitment was described
by Petitioner’s expert witness John Llewellyn during trial.  He explained that after the title
search is completed, the commitment is prepared.  Thereafter, 
the title commitment is basically the – is the title report that’s the face to
the clients involved, to – [] the purchaser of the property, would get a
copy of the title commitment to review . . . .
 [N]either the purchasers of the property or the sellers or the  –
any lenders involved are going to see the raw title abstract.  The only
thing they’re going to see – the only thing they’re going to know is
what’s on the title commitment that . . . what the status of the title is. 
[T]he purchaser would examine the title commitment to see . . .
there’s many things. . . . who is the owner of the property . . . the legal
description of the property . . . a metes and bounds description [of the
property.]
 . . . the things that would have to be done in order for a closing
22
to even take place . . . .
There would also be in there what things have to be in order – in
order to have marketable title transfer . . . routine things . . . like releases
or mortgages or deeds of trust . . . that affect the property . . . [and] [t]he
exceptions . . . that affect the property presently.
Furthermore, Mr. Llewellyn stated that “the most important aspect of what a title
settlement company does is to make sure that good title is passing, fee simple in this case,
marketable, insurable title is passing to the buyer.  That’s their main function in handling the
closing, and the most important function.” 
Gregory Reed, the Partnership’s attorney in the December transaction also testified
during a deposition as to the significance of the title binder to the purchaser.  He explained
that the title binder is “extremely important . . . you’re buying not dirt and bricks you’re
buying a bundle of legal rights and the title binder is what gives you a snapshot of what those
rights are supposed to be . . . [t]hat you have free title and that the title is not encumbered in
a way that’s not satisfactory to you.”
In the present case, the record contains a copy of the Title Commitment issued to the
Partnership by Cambridge on behalf of Chicago Title for the October transaction, and the
Title Commitment issued by Columbia on behalf of Safeco for the December transaction.
For the October transaction, Schedule A states that “[t]he estate or interest in the land
described or referred to in this Commitment and covered herein is [in] fee simple, and title
thereto is at the effective date hereof vested in: [the Millers], as tenants in common.”
Schedule B lists the title requirements and exceptions, and includes specific right of way
easements and agreements, from a title search.  The detailed description of the land is also
14 The record also contains a HUD-1 settlement statement for the December
transaction.
23
included as shown according to the survey conducted by Dewberry.  The Commitment did
not disclose the basic fact that the Millers had already sold some of the land to another party,
and could not sell the same land to the Partnership.  The record also contains a deed written
by Cambridge, by which the Millers purportedly conveyed to the Partnership the disputed
tract of land as part of a larger sale, even though the Millers did not own the disputed tract
at that time.  
Similarly, the December commitment lists the Partnership as owner of the land in fee
simple, describes, in detail, the exceptions in Schedule B-1, and includes the title
requirements and a description of the land.14  The December commitment incorrectly lists the
Partnership as the owner of the entirety of the parcel, when, in actuality, the Partnership
never owned the disputed tract and thus never had ownership rights to sell that land.
In the situation where there is only an economic injury, as in the present case, we note
that to impose tort liability under the standard discussed in Walpert, the Partnership would
have to establish: “(1) [that] the [Title Companies] must have been aware that the [title search
information] w[as] to be used for a particular purpose or purposes; (2) in the furtherance of
which a known party or parties was intended to rely; and (3) there must have been some
conduct on the part of the [Title Companies] linking [them] to that party or parties, which
evinces the [Title Companies’] understanding of that party or parties’ reliance.”  See Walpert,
361 Md. at 674, 690, 692-94, 762 A.2d at 597-98, 606, 607-09 (citing Credit Alliance Corp.
15 In a case involving economic injury, the “foreseeability approach” is not the
standard used for finding a duty in tort.  See Walpert, 361 Md. at 679-692, 762 A.2d at 600-
607 (noting that the foreseeability approach is an “expansive view” of liability, adopted by
only a few states, and then rejecting that approach in favor of the “privity” standard).  The
trier of fact in the present case discussed the concept of foreseeability in the context of the
duty of care owed by the Title Companies to the Partnership.  It is clear, however, that the
trial judge found that the Title Companies were aware that the Partnership would rely on the
title search.  The trial judge specifically found that “[i]t was certainly foreseeable that the
Title Companies would have known that the Partnership would rely on their title search.” 
24
v. Arthur Andersen & Co., 483 N.E.2d 110, 118 (1985)).  “Nothing in [this] test . . .
prescribes that the conduct exceed a minimum level . . . [n]or [is there] . . . a requirement that
the [Title Companies] either directly convey[ed] the [title report] to the [] party or otherwise
act[ed] in some manner specifically calculated to induce reliance on the [title report].”
Walpert, 361 Md. at 692, 762 A.2d at 608 (citations and quotations omitted).  Based on the
record and the evidence adduced at trial, the record supports the conclusion that there was
a sufficient intimate nexus between the Title Companies and the Partnership to establish a
duty owed by the Title Companies to the Partnership.  As such, the trier of fact was not
clearly erroneous in making this conclusion.15  When the Title Companies were engaged to
issue title commitments to the Partnership, the Partnership expected the Title Companies to
conduct a title search exercising reasonable care and skill, and to record the results of such
a search in the commitments issued to the Partnership.  Furthermore, the Partnership looked
to the title commitments and the information detailed by them to discern that the seller had
good and marketable title to the land.  The Partnership would have then relied on the
information obtained by the Title Companies in its title search and as stated in the title
25
commitment to help decide whether it would purchase the land. 
The intimate nexus in the present case stems from the relationship between the Title
Companies and the Partnership.  First, contractual privity is easily established as both parties
agree that the Partnership engaged the Title Companies to perform “title work” with regard
to the land that included the disputed tract.  The Title Companies also undertook to issue title
insurance commitments and title insurance policies underwritten by Chicago Title for the
Partnership.  Although a full recitation of the details of the contract are not known, from the
information contained in the title commitment it is evident that the Title Companies took it
upon themselves to perform a title search, and identify that search in the title commitments
issued to the Partnership.  These commitments contained detailed information applicable to
the sale of the land and offered in furtherance of the sale of the land.  There was sufficient
evidence that the title commitments induced the Partnership, or, at the very least, facilitated
the Partnership’s closing of the land transaction.  As the title information contained in the
title commitment was what the purchaser used to assess the status of the title, the Title
Companies knew that the Partnership would rely on this information to make the purchasing
decision.  See Walpert, 361 Md. at 684, 762 A.2d at 603 (discussing Glanzer, which
“recognize[d] that a defendant’s knowledge of a third party’s reliance on the defendant’s
action may be important in the determination of whether that defendant owes that party a
duty of care”). 
 In the instant case, the Title Companies knew that the Partnership would rely on the
title commitment.  The commitment, prepared by the Title Companies, specifically detailed
26
the kind of information found in a title search, including a description of the owners, what
the owners’ interests in the property were, and defects in title.  Such information is relied
upon in making decisions as to whether to proceed to closing.  In Glanzer, the Court of
Appeals of New York explained that the “plaintiffs’ use of the [weight] certificates was not
an indirect or collateral consequence of the action of the weighers.  It was a consequence
which, to the weighers’ knowledge, was the end and aim of the transaction.”  Glanzer, 135
N.E. at 275-76.  Similarly here, the Partnership’s reliance on the information in the
commitment, supplied by the Title Companies to use in considering whether to proceed to
closing, was not an indirect consequence of the Title Companies’ issuance of a commitment;
it was an aim of the title insurance transaction.  By supplying information normally adduced
in a title search and placing that information in a preliminary title report before closing, the
Title Companies were on notice that the Partnership would use that information to assess the
ownership rights it would acquire. 
As we stated in Chicago Title Ins. Co. v. Allstate Bank, “[u]nlike the facts of
Ultramares, our holding does not impose liability on [the defendant] to an indeterminate
class of people for an indeterminate time, but rather, addresses a specific entity . . . .”
Chicago Title Ins. Co., 394 Md. at 299-300, 905 A.2d at 383.  Here, it was the Partnership
that engaged both Title Companies to do title work to facilitate the purchase of a specific
tract of land.  The Title Companies procured the search and supplied this information in the
title commitment for the benefit of the Partnership on behalf of the insurance provider for the
purposes of the future sale of land. 
16 Those in contractual privity or its equivalent with the title company for that
particular transaction might include a lending bank or property seller or buyer, for example,
who the title company knows will rely on that particular search between the title company
and the customer.  See Joyce Dickey Palomar, Title Insurance Companies’ Liability for
Failure to Search Title and Disclose Record Title, 20 Creighton L. Rev. 455, 461, 480-81
(1986) (explaining that title insurance purchasers are usually property sellers “who have
agreed to provide a title insurance . . . policy for the buyer,” property buyers insuring
themselves against loss, or property buyers who are required to provide their lenders a title
policy insuring against loss, and that title commitments are “normally relied upon by
insureds, escrow agents, and lenders with full knowledge, and sometimes with the
encouragement, of the insurance company”).
27
Given the relationship of the parties in the present case, the significance of the title
search, the details outlined in the preliminary title commitment report, and the fact that an
insured looks to the title commitment for the purpose of making business decisions, we
conclude that the Title Companies, under the circumstances, had a duty to exercise
reasonable care in conducting the preliminary title search and transmitting that information
to its customer.  We recognize that this duty applies to the customer, and may extend to other
parties in contractual privity or its equivalent with the title company who rely on the search
for that particular contractual undertaking.16  The duty is to employ reasonable care.  The
duty is not to act as guarantor.  Cf.  Bank of Cal., N.A. v. First Am. Title Ins. Co., 826 P.2d
1126, 1129 & n. 5 (Alaska 1992) (finding a duty of reasonable care with regard to
information contained in a title commitment).  Thus, we conclude that, given the relationship
of the parties in this case, it is appropriate to apply the tort negligence standard to those
individuals or entities who examine title for compensation as discussed in Corcoran, 217 Md.
633, 637, 143 A.2d 808, 810 (1958).  The duty undertaken by the title examiner is to exercise
17 The Court noted that by issuing the commitment before the closing of the land
contract, the commitment arrives at the “same stage in the transaction as [] the abstract or
attorney’s opinion . . . and the [title] company should know that it will likely be used in the
same manner.”  Bank of Cal. N.A. v. First Am. Title Ins. Co., 826 P.2d 1126, 1129 (Alaska
1992) (citations omitted).
28
a reasonable degree of skill and diligence in the conduct of the transaction.  Corcoran, 217
Md. at 637, 143 A.2d at 810.
Other states have also looked to the title commitment, and the title company’s (or the
title insurance company’s) awareness that clients and known purchasers rely on the
information supplied in the title commitment to support tort liability.  In Bank of Cal., N.A.
v. First Am. Title Ins. Co., 826 P.2d 1126, 1129 (Alaska 1992), the Supreme Court of Alaska
held that there may be tort liability for negligent information supplied in a preliminary title
commitment.  The Court explained that the information in the commitment is relied upon,
and is intended to be relied upon, by the title insurance companies.  Had the commitment
been merely intended to inform the insured of the proposed terms, the Court explained, it
would have been presented together with the insurance policy, similar to most other types
of insurance.  Id.  (citations omitted).  Rather, the Court highlighted, the commitment is
issued prior to the real property closing.17  The Court explained that “such commitments
provide an essential service to prospective buyers and lenders.  They are told what
transactions must take place before they can receive clear title or [] effective security.”  Id.
Furthermore, the title insurance company (or title company) has “full knowledge” that the
18 It should be noted that while the Bank of California Court emphasized its finding
of tort liability through the duty assumed by title examiners in providing the title insurance
commitment, it also noted an “additional factor” that a provision in the Alaska Code would
have also imposed tort liability.  Bank of Cal., 826 P.2d at 1130.
29
title information provided in the commitment is “normally relied on” by the insured.18  Id.
See also Malinak v. Safeco Title Ins. Co. of Idaho, 661 P.2d 12, 15-16 (Mont. 1983) (finding
a duty based on the commitment, especially when there is reliance, and explaining that “[t]he
person who seeks a title insurance commitment expects to obtain a professional title search,
as well as a professional legal opinion as to the condition of the title and a guaranty that the
title expressed in the commitment will be insured to the extent of the policy coverage”). 
 Those states that find no tort liability for a negligent title search emphasize the
insurance function of the title policy alone.  See Brown’s Tie & Lumber Co. v. Chicago Title
Co. of Idaho, 764 P.2d 423, 425-26 (Idaho 1988) (explaining that the title insurance contracts
and policies are “the source of the duties between the parties, not negligence principles”);
Walter Rogge, Inc. v. Chelsea Title & Guar. Co., 562 A.2d 208, 220 (N.J. 1989) (establishing
the title policy as the principal source for liability); see also James Bruce Davis, More Than
They Bargained For: Are Title Companies Liable in Tort for Undisclosed Title Defects?, 45
Cath. U. L. Rev. 71, 75-78, 90 (1995) (citations omitted) (noting the split in authority, and
stating that courts finding tort liability view the issuance of the commitment and policy as
the undertaking of a duty to supply the insured with title information, whereas courts that
find tort principles inapplicable stress that the policy is the “source and measure of the
company’s liability”).
19 In Jacques, we considered the public nature of the professional banking business,
explaining that “[t]raditionally banks and their officers have been held to a high degree of
integrity and responsiveness to their public calling.”  Jacques, 307 Md. at 542, 515 A.2d at
763.  In that discussion, we noted the requirements imposed on the industry by the General
Assembly.  Jacques, 307 Md. at 542-43, 515 A.2d at 763-64.  We recognize the importance
and instructiveness of requirements imposed on professionals by the General Assembly, and
at the same time note that legislative requirements are not the only basis for establishing a
tort duty. 
30
In the context of holding professionals liable not only in contract but also in tort, this
Court has considered alternative approaches to establishing tort liability.  See Walpert, 361
Md. at 676-80, 762 A.2d at 599-601 (2000) (acknowledging and discussing at length the
additional approaches used in finding a duty, besides privity).  These duties are frequently
related to the “public calling” of the professional.  As we explained in Jacques, 307 Md. at
541, 515 A.2d at 763 (citations omitted):
An additional factor relevant to the determination of whether to
recognize the existence of a tort duty is the nature of the business of the
party upon whom the burden is sought to be imposed.  Judge Cardozo
commented on the “public calling” of the defendants in Glanzer v.
Shepard and [Ultramares].  The law generally recognizes a tort duty of
due care arising from contractual dealings with professionals such as
physicians, attorneys, architects and public accountants.  Additionally,
we have recognized that in those occupations requiring peculiar skill, a
tort duty to act with reasonable care will be imposed on those who hold
themselves out as possessing the requisite skill.19 
Judge Meredith, in his dissent in this case, discussed the special theories of liability
in tort that apply to professionals.  Columbia Town Ctr. Title Co., 203 Md. App. at 105-07,
36 A.3d at 1011 (Meredith, J., dissenting).  That analysis is instructive in the present case
with regard to title companies.  Similar to Judge Meredith, we recognize Professors Dobbs,
31
Hayden, and Bublick’s treatise on torts, noting that “even states which limit tort actions for
negligent performance of a contract generally permit recovery in tort for economic losses
caused by the negligent services of a professional.”  Columbia Town Ctr. Title Co., 203 Md.
App. at 105, 36 A.3d at 1011 (Meredith, J., dissenting) (citing 3 Dan B. Dobbs, Paul T.
Hayden & Ellen M. Bublick, The Law of Torts § 615 at 494-95 (2d ed. 2011)). The treatise
states:
Actions for certain negligent services permitted; attorneys and
“professionals.”  Application of the economic loss rule to services seems
consistent with the policy behind the rule, but it opens up a new problem.
Courts continue to permit negligence actions by clients against such
service providers as attorneys, accountants, insurance brokers, notaries
and [sic] sometimes even title insurers who perform a negligent title
search.  On the one hand, the economic loss rule often protects other
providers of services, such as building contractors, against liability for
their negligence. Some courts have sought to explain the uneven
treatment of service providers by saying that the economic loss rules
does not apply to bar negligence actions against defendants who are
professionals, or defendants who are in a special relationship with the
plaintiff, or those whose contract obligation does not include production
or delivery of a tangible object. It may be that all of these efforts to
describe the exception are heuristics – pragmatic short-cuts that might
usually but not always coincide with a principled exception.  Perhaps, the
overriding principle is that defendants who, like attorneys, are in a
special relationship with the plaintiff, or who contract to foster the
plaintiff’s interests and who are not contracting as adversarial bargainers
or competitors, should be subject to the duties of care imposed by
negligence law. That would explain the cases and offer a realistic basis
for judicial decision-making. 
Dobbs, supra, at 494-95 (footnotes omitted).
In applying the professional standard to title examiners, Judge Meredith, in his
dissenting opinion, explained that the standard applies not only to doctors and lawyers, but
32
to professionals that provide paralegal information services, such as examining title.  He
noted that “[b]ecause the services that were negligently provided by the title companies in
this case – viz., examining title and preparing a deed of conveyance – were services that have
historically been performed by attorneys, the title companies should be held to the same duty
of care that would have applied if the [Partnership] had hired a licensed attorney to provide
those services.”  Columbia Town Ctr. Title Co., 203 Md. App. at 105-06, 36 A.3d at 1011;
see also Jarchow v. Transamerica Title Ins. Co., 122 Cal. Rptr. 470, 485 (Cal. Ct. App.
1975), superseded by statute, Cal. Ins. Code § 12340.11 (West 2005) (explaining that a title
insurance company that supplies the insured with a commitment before a property closing
assumes the role [and duty] of a title abstractor to check the records and report any title
problems in the preliminary title report); Ford v. Guarantee Abstract & Title Co., 553 P.2d
254, 264 (Kan. 1976) (citations omitted) (comparing a title examiner to an attorney,
explaining that a company which is organized for the purpose of examining title assumes
similar functions as an attorney and should have similar duties); Heyd v. Chicago Title Ins.
Co., 354 N.W.2d 154, 157-59 (Neb. 1984) (noting that when a title examiner renders a title
report it “serves as an abstractor of title and must list all matters of public record adversely
affecting title to the real estate which is the subject of the title report”); Davis, More Than
They Bargained For, 45 Cath. U. L. Rev. at 87-91 (discussing the different reasons why
courts have found title examiners liable in tort).
Similarly, in Walpert, although we applied the privity approach, we discussed an
additional basis for liability assumed by professional “suppliers of information,” as outlined
33
in Restatement 552.  Walpert, 361 Md. at 673-78, 762 A.2d at 597-600.  Restatement
(Second) of Torts § 552 (1977), states:
(1) One who, in the course of his business, profession or employment, or
in any other transaction in which he has a pecuniary interest, supplies
false information for the guidance of others in their business transactions,
is subject to liability for pecuniary loss caused to them by their justifiable
reliance upon the information, if he fails to exercise reasonable care or
competence in obtaining or communicating the information.
(2) Except as stated in Subsection (3), the liability stated in Subsection
(1) is limited to loss suffered 
(a) by the person or one of a limited group of persons for whose benefit
and guidance he intends to supply the information or knows that the
recipient intends to supply it; and 
(b) through reliance upon it in a transaction that he intends the
information to influence or knows that the recipient so intends or in a
substantially similar transaction.
(3) the liability of one who is under a public duty to give the information
extends to loss suffered by any of the class of persons for whose benefit
the duty is created, in any of the transactions in which it is intended to
protect them.
By its terms, Restatement 552 would limit the title examiner’s liability for professional
negligence to the title examiner’s customer and to those third parties to whom the title
examiner either intends to supply the information or actually knows the customer intended
to supply it.  See Walpert, 361 Md. at 694-95, 762 A.2d at 609 (Wilner, J., concurring).
Judge Meredith also acknowledged Restatement 552 as a basis for tort liability
assumed by title companies.  Columbia Town Ctr. Title Co., 203 Md. App. at 106-07, 36
A.3d at 1011-12 (Meredith, J., dissenting).  He compared what the Title Companies did in
the present case to those who, in the course of their business or profession, negligently
34
supply information for the guidance of others in their business transactions.  Under this
theory of liability, when the Title Companies provided the preliminary title information to
the Partnership, they owed a duty to exercise reasonable care to the Partnership or others that
the Title Companies knew would rely on the information.  See Bank of Cal., 826 P.2d at 1129
& n. 5 (noting that title companies “have a duty of care concerning the preliminary title
information which they transmit to their customers,” citing the duty to exercise reasonable
care noted in Restatement 552); cf. Hawkins v. Oakland Title Ins. & Guar. Co., 331 P.2d 742,
746-48 (Cal. Ct. App. 1958) (recognizing tort liability based on negligent preliminary
reports, noting that the report is issued to guide the insured according to the standard
described in Restatement 552); Joyce Dickey Palomar, Title Insurance Companies’ Liability
for Failure to Search Title and Disclose Record Title, 20 Creighton L. Rev. 455, 477-78
(1986).
Therefore, under the privity theory, discussed above, or under Restatement 552, the
Title Companies owed a duty in tort to its customer, the Partnership, based on the negligent
preliminary report contained in the title commitment.  We emphasize the duty in tort is
separate and independent of a contractual duty, and is a duty undertaken by the title examiner
to use a reasonable degree of skill and diligence in conducting the title search and issuing the
commitment.  See Corcoran, 217 Md. at 637, 143 A.2d at 810.  The duty explicated herein
does not extend to those defects that a reasonable title search would not disclose. 
III.
Next, we determine whether, on the facts of this case, Chicago Title (the title
20 Because Chicago Title acquired Safeco, and with the acquisition assumed Safeco’s
title insurance policies, we will refer to the policies as Chicago Title’s policies.
35
insurance company) is vicariously liable to the Partnership as a result of the Title Companies’
negligent title search. 
The parties dispute whether there was an agency relationship between the Title
Companies and Chicago Title such that the Partnership could pursue a vicarious liability
claim against Chicago Title.  Additionally, Chicago Title contends that the title insurance
policy, signed by the Partnership and Chicago Title,20 limits all claims to the insurance
policy.  The policy states: 
SUBJECT TO THE EXCLUSIONS FROM COVERAGE, THE
EXCEPTIONS CONTAINED IN SCHEDULE B AND THE
PROVISIONS OF THE CONDITIONS AND STIPULATIONS
HEREOF, SAFECO TITLE INSURANCE CORPORATION, a
Maryland corporation, herein called the Company, insures, as of Date of
Policy shown in Schedule A, against loss or damage, not exceeding the
amount of insurance stated in Schedule A, and costs, attorneys’ fees and
expenses which the Company may become obligated to pay hereunder,
sustained or incurred by the insured by reason of:
1. Title to the estate or interest described in Schedule A being vested
otherwise than as stated therein;
2. Any defect in or lien or encumbrance on such title;
3. Lack of a right of access to and from the land; or
4. Unmarketability of such title.
The “Conditions and Stipulations” section contains a limitation on liability clause: 
12. Limited Liability to this Policy
This instrument together with all endorsements and other instruments, if
any, attached hereto by [Safeco] is the entire policy and contract between
the insured and the Company.
36
Any claim of loss or damage, whether or not based on negligence, and
which arises out of the status of the title to the estate or interest covered
hereby or any action asserting such claim, shall be restricted to the
provisions and conditions and stipulations of this policy.  (Emphasis
added).
The trial court found, under the doctrine of respondeat superior, that the Title
Companies were agents of Chicago Title, and, as such, Chicago Title could be vicariously
liable for its agents’ negligence.  The panel of the intermediate appellate court reversed
unanimously, based on, among other reasons, the exculpatory clause included in the
insurance policy restricting any claims against Chicago Title to the terms of the contract.
Columbia Town Ctr. Title Co., 203 Md. App. at 99-103, 36 A.3d at 1007-10. 
We agree with the intermediate appellate court that the title insurance company is not
vicariously liable for the Title Companies’ negligent title search as reported in the title
commitment.  We base this holding on the exculpatory language in the agreement between
the Partnership and Chicago Title that explicitly precludes a claim in negligence.  As such,
we need not, and do not, address whether there existed a respondeat superior relationship
between the Title Companies and Chicago Title. 
We interpret the exculpatory language in the insurance policy under the objective
theory of contracts.  Ocean Petroleum, Co., Inc. v. Yankek, 416 Md. 74, 86, 5 A.3d 683, 690
(2010) (citations omitted) (explaining that Maryland courts apply an objective approach to
contract interpretation); Clendenin Bros., Inc. v. U.S. Fire Ins. Co., 390 Md. 449, 458-59, 889
A.2d 387, 393 (2006) (noting that we apply the objective interpretation of contracts with
equal force to insurance policies).  “Thus, our search to determine the meaning of [the]
37
contract is focused on the four corners of the agreement.”  Clancy v. King, 405 Md. 541, 557,
954 A.2d 1092, 1101 (2008) (citations and quotations omitted).  “When the clear language
of a contract is unambiguous, the court will give effect to its plain, ordinary, and usual
meaning, taking into account the context in which it is used . . . [i]n contrast, a contract is
ambiguous if it is subject to more than one interpretation when read by a reasonably prudent
person.”  John L. Mattingly Constr. Co., Inc. v. Hartford Underwriters Ins. Co., 415 Md.
313, 326-327, 999 A.2d 1066, 1074 (2010) (citations and quotations omitted).  If the
language in the contract is ambiguous, the court considers  extrinsic evidence clarifying the
parties’ intentions at the time the contract is executed.  Id.  (citations omitted).
It is well settled in Maryland that exculpatory clauses are generally valid.  Adloo v.
H.T. Brown Real Estate, Inc., 344 Md. 254, 259, 686 A.2d 298, 301 (1996) (citations
omitted).  The presumption of validity is consistent with the public policy rationale of
freedom to contract.  Wolf v. Ford, 335 Md. 525, 531, 644 A.2d 522, 525 (1994) (citations
omitted).  We have noted, with regards to clauses limiting liability for negligence, that:
It is quite possible for the parties expressly to agree in advance that the
defendant is under no obligation of care for the benefit of the plaintiff,
and shall not be liable for the consequences of conduct which would
otherwise be negligent.  There is in the ordinary case no public policy
which prevents the parties from contracting as they see fit . . . . 
Wolf, 335 Md. at 531, 644 A.2d at 525 (citing W. Page Keeton, et al., Prosser and Keeton
on the Law of Torts § 68 at 482 (5th ed. 1984)).  See also Restatement (Second) of Contracts
§ 195 cmt. a (1981) (explaining that “a party to a contract can ordinarily exempt himself from
21 Another jurisdiction has held similar clauses to “at best relate to a matter of defense,
not to prohibition of a cause of action based on negligence.”  Heyd v. Chicago Title Ins. Co.,
354 N.W.2d 154, 159 (Neb. 1984).  
38
liability for harm caused by his failure to observe the standard of reasonable care imposed
by the law of negligence”). 
In the present case, the language is unambiguous that Chicago Title’s liability is
expressly limited to the terms of the policy.  Columbia Town Ctr. Title Co., 203 Md. App.
at 102, 36 A.3d at 1008-09.  The clause states that “any claim of loss or damage, whether or
not based on negligence, and which arises out of the status of the title to the estate . . . shall
be restricted to the provisions and conditions and stipulations of this policy.”  Id.  (emphasis
added).  This language is clear on its face, and indicates that the parties expressly intended
to follow the terms of the policy, even if a negligence claim were plausible.  A claim of
vicarious liability against Chicago Title for the Title Companies’ negligent title search is a
“claim of loss or damage,” “based on negligence,” that “arises out of the status of title.”  As
such, the claimed loss against Chicago Title is “restricted to the provisions and conditions
and stipulations of [the] policy.”  A plain reading of this policy language demonstrates the
parties’ intent to limit claims against Chicago Title to the contract.  See Columbia Town Ctr.
Title Co., 203 Md. App. at 102, 36 A.3d at 1009.  Therefore, Chicago Title may not be held
vicariously liable for negligence.21 
We note, however, that in certain circumstances, the public interest will not permit,
and the judiciary will not enforce, exculpatory clauses in contracts.  Adloo, 344 Md. at 260,
39
686 A.2d at 301 (citations omitted).  Non-enforcement may occur, for example, when
legislation proscribes such clauses.  See Nat’l Glass, Inc. v. J.C. Penney Props., Inc., 336
Md. 606, 615, 650 A.2d 246, 250 (1994) (holding, based on a statute in the Maryland Real
Property Article, that a contractual provision waiving the right to claim a mechanic’s lien is
void as against public policy); Bethlehem Steel Corp. v. G.C. Zarnas & Co., Inc., 304 Md.
183, 190-95, 498 A.2d 605, 608-11 (1985) (noting the legislature’s explicit determination
that indemnification clauses in construction contracts providing for indemnity against the
tortfeasor’s own negligence are unenforceable pursuant to public policy); see also Md. Code
(1974, 2010 Repl. Vol.), § 8-105 of the Real Property Article (prohibiting certain exculpatory
clauses for a landlord’s negligence); Md. Code (1973, 2006 Repl. Vol., 2012 Cum. Supp.),
§ 5-401 of the Courts and Judicial Proceedings Article (prohibiting certain construction
indemnity clauses).  
There are three general circumstances in which exculpatory clauses are deemed
invalid and will not be enforced:  
First, a party will not be permitted to excuse its liability for intentional
harms or for the more extreme forms of negligence, i.e., reckless,
wanton, or gross.  Second, the contract cannot be the product of grossly
unequal bargaining power. When one party is at such an obvious
disadvantage in bargaining power that the effect of the contract is to put
him at the mercy of the other’s negligence, the agreement is void as
against public policy.  Third, public policy will not permit exculpatory
agreements in transactions affecting the public interest.  This last
category includes the performance of a public service obligation, e.g.,
public utilities, common carriers, innkeepers, and public warehousemen.
It also includes those transactions, not readily susceptible to definition
or broad categorization, that are so important to the public good that an
exculpatory clause would be patently offensive, such that the common
22 Factor tests, such as the “Tunkl test,” enunciated in Maryland in Winterstein v.
Wilcom, 16 Md. App. 130, 136-37, 293 A.2d 821, 825 (1972), may be used to guide the
court, although its six factors are not meant to be conclusive.  See Wolf v. Ford, 335 Md. 525,
532-35, 644 A.2d 522, 526-27 (1994). These factors are: 
It concerns a business of a type generally thought suitable for public
regulation. The party seeking exculpation is engaged in performing a
service of great importance to the public, which is often a matter of
practical necessity for some members of the public. The party holds
himself out as willing to perform this service for any member of the
public who seeks it, or at least for any member coming within certain
established standards.  As a result of the essential nature of the service,
in the economic setting of the transaction, the party invoking exculpation
possesses a decisive advantage of bargaining strength against any
member of the public who seeks his services.  In exercising a superior
bargaining power the party confronts the public with a standardized
adhesion contract of exculpation, and makes no provision whereby a
purchaser may pay additional reasonable fees and obtain protection
against negligence. Finally, as a result of the transaction, the person or
property of the purchaser is placed under the control of the seller, subject
to the risk of carelessness by the seller or his agents. 
Winterstein, 16 Md. App. at 136-37, 293 A.2d at 825 (citing Tunkl v. Regents of the Univ.
of Calif., 383 P.2d 441, 445-46 (Cal. 1963)). 
40
sense of the entire community would . . . pronounce it invalid.
Wolf, 335 Md. at 531-32, 644 A.2d at 525-26 (citations and quotations omitted).  We
determine what constitutes the public interest under the “totality of the circumstances of any
given case against the backdrop of current societal expectations.”  Wolf, 335 Md. at 535, 644
A.2d at 527.  We have explicitly rejected a rigid test in making this determination.22
Based on the evidence presented by the parties, “the three exceptions to the general
rule permitting exculpatory clauses” are not applicable in the present case.  See Wolf, 335
Md. at 535, 644 A.2d at 527-28.  There has been no allegation of fraud or of extreme forms
41
of negligence.  Additionally, there is no evidence of disparate bargaining power.  The parties
in the present case (save perhaps the Miller sisters) are sophisticated commercial entities that
have likely engaged in similar real property transactions in the past.  Perhaps if there were
evidence that the contract was a contract of adhesion, “drafted unilaterally by the dominant
party and then presented on a ‘take-it-or-leave-it’ basis to the weaker party who had no real
opportunity to bargain about its terms,” we would scrutinize the exculpatory language
differently.  Walther v. Sovereign Bank, 386 Md. 412, 430, 872 A.2d 735, 746 (2005)
(citations and quotations omitted).  Finally, the Partnership has not directly asserted any
public policy arguments as to why the clause should not be enforced, nor has the Legislature
indicated that Maryland public policy requires that we “should disturb the parties’ ability to
contractually exempt a party from liability for negligence.”  Wolf, 335 Md. at 536-37, 644
A.2d at 528.  
JUDGMENT OF THE COURT OF SPECIAL
APPEALS AFFIRMED IN PART AND
REVERSED IN PART.  CASE REMANDED
TO THAT COURT WITH DIRECTIONS TO
ENTER A JUDGMENT CONSISTENT WITH
THIS OPINION.  THE PARTNERSHIP AND
THE TITLE COMPANIES (CAMBRIDGE
AND COLUMBIA) TO DIVIDE THE COSTS
IN THIS COURT AND THE COURT OF
SPECIAL APPEALS. 
42