Case Title: Eastern Shore Title Co. v. Ochse

Citation: 

Docket Number: 16/16

State: maryland

Court: Maryland Supreme Court

Date: 2017-05-31T00:00:00Z

Document:
Eastern Shore Title Company v. Steven J. Ochse, et al., No. 16, September Term, 2016.  
Opinion by Getty, J. 
 
TORTS — NEGLIGENCE — DAMAGES — COLLATERAL LITIGATION 
DOCTRINE — Maryland follows the “American Rule,” which provides that the costs and 
expenses of litigation, other than the usual and ordinary court costs, are not recoverable in 
an action for damages.  However, the American Rule is not an absolute bar and, in 
Maryland, the collateral litigation doctrine is an exception to the American Rule.  The 
collateral litigation doctrine permits the recovery of attorney’s fees incurred by the plaintiff 
where the wrongful acts of a defendant involved the plaintiff in litigation with others and 
made it necessary to incur expenses to protect his or her interest, and such costs and 
expenses should be treated as legal consequences of the original act. 
 
TORTS — NEGLIGENCE — DAMAGES — COLLATERAL LITIGATION 
DOCTRINE —  ELEMENTS — If a plaintiff incurred litigation expenses, then the 
plaintiff may recover collateral litigation expenses as damages by demonstrating that such 
expenses were the natural and proximate consequence of the injury complained of, were 
incurred necessarily and in good faith, and were a reasonable amount.   
 
TORTS — NEGLIGENCE — DAMAGES — COLLATERAL LITIGATION 
DOCTRINE — CALCULATION OF DAMAGES — To calculate damages in a 
negligence action based on the collateral litigation doctrine, the trial court is permitted to 
take judicial notice of the attorney’s fees and litigation costs incurred as a result of the 
original litigation, and use those fees and costs as a measure of damages in the collateral 
litigation lawsuit.   
 
TORTS — NEGLIGENCE — DAMAGES — COLLATERAL LITIGATION 
DOCTRINE —  CONTRACTUAL FEE-SHIFTING PROVISION — A plaintiff may 
only recover collateral litigation expenses as damages in a negligence cause of action if the 
plaintiff actually incurred the attorney’s fees.  Thus, if the plaintiff recovered the collateral 
litigation expenses pursuant to a contractual fee-shifting provision, then the plaintiff cannot 
also recover those same attorney’s fees under a collateral litigation doctrine theory of 
damages.    
 
 
 
 
Circuit Court for Talbot County 
Case No. 20-C-10-007315 
Argued: October 6, 2016 
 
 
IN THE COURT OF APPEALS 
 
OF MARYLAND 
 
No. 16 
 
September Term, 2016 
 
 
  
EASTERN SHORE TITLE COMPANY 
 
 
 
 
   v. 
 
STEVEN J. OCHSE, ET AL. 
 
 
Barbera, C.J. 
Greene, 
Adkins, 
McDonald, 
Watts, 
Getty,  
Battaglia, Lynne A. 
         (Senior Judge, Specially Assigned), 
 
JJ. 
 
 
Opinion by Getty, J. 
 
 
Filed: May 31, 2017 
 
“The long and winding road 
that leads to your door 
Will never disappear 
I’ve seen that road before 
*  *  * 
But still they lead me back  
to the long winding road . . .”  
 
The Beatles, The Long & Winding Road (Apple Records 1970). 
 
In this case, the long and winding road virtually disappeared and, more regrettably, 
went undetected during the title search for the 2001 sale of a five-acre residential lot in 
Dorchester County.  Eastern Shore Title Company (“ESTC”), Petitioners and Cross-
Respondents, conducted the title search for Mr. Steven Ochse and Ms. Shari Ochse (“the 
Ochses”), Respondents and Cross-Petitioners, when they purchased the lot from Mr. 
William Henry and Ms. Jessie Henry (“the Henrys”). 
However, vestiges of the road leading to the Ochses’ door were evident in the 
physical remains of a gravel roadbed.  To further compound the confusion, an outline of 
the roadbed was documented on the Henrys’ subdivision plat1 but was mistakenly 
designated as a “driveway.”  In the course of improving the property, a landscape contractor 
advised the Ochses about his suspicions that the gravel roadbed was more than just a 
“driveway.”  After further investigation, the Ochses filed their initial lawsuit to quiet title 
against the Henrys (“the Henry litigation”). 
                                                 
1 Land Records of Dorchester County, Plat Cabinet M.L.B. 46, p. 108B. 
 
2 
 
After residing on the property for approximately seven years, the Ochses finally 
learned during the Henry litigation that the “driveway” encumbrance bisecting their lot was 
actually part of a thirty-foot-wide strip of land, which had been granted in fee simple 
determinable to Dorchester County by a 1919 deed for the purpose of making a new county 
road.  Thereafter, the Ochses’ melancholy ballad took a long winding road through 
Maryland’s appellate courts (see E. Shore Title Co. v. Ochse, No. 0999, 2015 WL 9590716, 
at *1 (Md. Ct. Spec. App. 2015); Ochse v. Henry, 216 Md. App. 439 [hereinafter Ochse 2], 
cert. denied, 439 Md. 331 (2014); Ochse v. Henry, 202 Md. App. 521 (2011) [hereinafter 
Ochse 1], cert. denied, 425 Md. 396 (2012)); but still it leads them back to this Court on 
issues of the collateral litigation doctrine and the collateral source rule. 
The underlying case to this appeal is a lawsuit collateral to the Henry litigation that 
was filed by the Ochses on June 25, 2010 in the Circuit Court for Talbot County against 
Chicago Title Insurance Company (“Chicago Title”)2 and ESTC, the title examiner, in 
which the Ochses alleged that ESTC breached the contract intended to benefit the Ochses 
and was negligent in its title examination.  The trial court found in favor of the Ochses and, 
as a result, awarded them compensatory damages for their litigation costs and expenses, 
including a $215,710.60 judgment against ESTC and Chicago Title, which was the amount 
of the attorney’s fees awarded to the Ochses in the Henry litigation.   
                                                 
2 We note that Chicago Title Insurance Company (“Chicago Title”) is not a party to 
this appeal and did not join Eastern Shore Title Company (“ESTC”) in the appeal to the 
Court of Special Appeals, E. Shore Title Co., 2015 WL 9590716, at *1.  
 
3 
 
ESTC and Chicago Title thereafter moved to alter or amend that judgment, pointing 
out that the Henrys had already paid the attorney’s fees awarded in the Henry litigation.  
The trial court granted that motion and reduced its judgment against ESTC and Chicago 
Title by the full $215,710.60—the amount of attorney’s fees that the Ochses had already 
recovered from the Henrys in the Henry litigation.  The Ochses and ESTC appealed the 
case to the Court of Special Appeals.  In an unreported opinion, the Court of Special 
Appeals remanded the case for a determination of whether the collateral litigation doctrine 
applied and to clarify the attorney’s fees award.  E. Shore Title Co., 2015 WL 9590716, at 
*18, *21.     
ESTC petitioned this Court for a writ of certiorari, and the Ochses filed a cross-
petition.  We granted both the petition and the cross-petition on May 20, 2016.  E. Shore 
Title Co. v. Ochse, 448 Md. 29 (2016).  We hold that, in order to recover attorney’s fees 
against a negligent title searcher using the collateral litigation doctrine theory of damages, 
the plaintiff must show that the title searcher’s negligence proximately caused the plaintiff 
to file a necessary collateral action, resulting in the plaintiff incurring reasonable litigation 
costs or expenses necessarily and in good faith, and that the plaintiff has not otherwise 
received compensation for those costs and expenses.  Thus, we reverse the judgment of the 
Court of Special Appeals, and affirm the judgment of the trial court.   
 
 
 
4 
 
I 
Background  
A. Factual Background   
The underlying facts and procedural paths of this case and the collateral case have 
been thoroughly described in three appellate opinions.  See E. Shore Title Co., 2015 WL 
9590716, at *1; Ochse 1, 202 Md. App. at 521; Ochse 2, 216 Md. App. at 439.  We restate 
the facts that are relevant to this appeal, all of which are uncontested.   
1919 County Road Deed  
The elusive 1919 county road deed was executed on March 2, 1919, and was 
recorded on May 27, 1919 among the Land Records for Dorchester County Maryland in 
Liber W.H.M. 6, folio 332.   A total of fourteen property owners conveyed portions of their 
land to Dorchester County to create a thirty-foot-wide strip of land, “for the purpose of 
making a new county road.”  According to the deed, the strip of land had been “marked 
out, partly cut out and opened.”3  Dorchester County thus acquired a fee simple 
determinable interest in the strip of land.4  However, the deed included a reversionary 
                                                 
3 At trial, Ms. Ochse testified that the road was a “gravel run,” and Mr. Ochse 
testified that the road had “a thin amount of stone, laid down and you could see that there 
was occasional access over it.”  
4 The deed described the public county road as follows: 
[B]eginning at a bridge over a branch called “Miles Branch”, the said branch 
being at that point the line of division between Caroline County and 
Dorchester County, Maryland, and from thence in an even width of thirty 
feet over the course heretofore surveyed by Richard Dixon, formerly road 
engineer for Dorchester County, as laid down by said engineer, over and 
through the lands of [Grantors] to what is called the “New Ferry Road” 
leading from the bridge at Harrison’s Ferry to Finchville . . . being located in 
the Fork or Election district No. 1 of Dorchester County, Maryland, the said 
 
5 
 
clause, which stated that “if the [county road] is abandoned by the said County 
Commissioners of Dorchester County, or their successors in interest, the lands hereby 
conveyed shall revert back to the said grantors, their heirs and assigns, so far as the same 
are within the bounds of the lands of the respective grantors heretofore mentioned.”   
Chronology of Pertinent Property Interests 
One of the fourteen property owners was Henry B. Messenger, who held title to 
approximately 150 acres of land in this vicinity south of Federalsburg.5  Over the years, 
portions of Mr. Messenger’s property were conveyed to various property owners.  Of 
significance to this litigation, one of those conveyances—Mr. Messenger’s conveyance on 
August 30, 1966 of two parcels to the Mayor and Council of  Federalsburg for conservation 
efforts along Marshythorpe Creek, which adjoined his property—referenced two plats that 
                                                 
road and the said strip of land hereby conveyed being thirty feet wide its 
entire length[.] 
5 By deeds recorded on October 29, 1902, November 21, 1914, and March 17, 1916.  
Land Records of Dorchester County, Plat Cabinet Liber C.L. 27, folio 205; Plat Cabinet 
Liber W.L.R. 8, folio 202; Plat Cabinet Liber W.H.M. 2, folio 31. 
Subsequently, Mr. Messenger was delinquent in tax payments, and a tax sale of his 
property took place by a deed dated November 23, 1929.  However, the following year, the 
property sold at the tax sale was conveyed back to Mr. Messenger by a deed dated June 17, 
1930.  Land Records of Dorchester County, Plat Cabinet Liber C.L. 25, folio 9; Plat 
Cabinet Liber C.L. 69, folio 250. 
 
6 
 
depict a roadway labeled as a “county road” within the vicinity of Mr. Messenger’s 
remaining property (the “1966 plats”).6 
Subsequently, a thirty-five-acre parcel of the Messenger property was conveyed on 
June 29, 1972 by Esther White Messenger7 to R.T.R., Inc.  On March 18, 1987, R.T.R., 
Inc. conveyed the same property by deed8 to the Henrys.  This thirty-five-acre parcel 
ultimately purchased by the Henrys included the county road owned by Dorchester County 
as referenced in the 1919 deed and 1966 plats. 
In 1998, the Henrys subdivided this parcel to create a lot of approximately five acres 
that included the county road, known as 2890 Mowbray Creek Road, Federalsburg.9  Then, 
on September 13, 2001, Mr. and Ms. Ochse entered into a contract with the Henrys to 
purchase the subdivided parcel of land for $325,000.00 (the “Contract of Sale”).  The 
Contract of Sale, which was in the standardized form of a Maryland Residential Contract 
of Sale, provided that “[t]itle to the Property . . . shall be good and merchantable, free of 
liens and encumbrances except as specified herein.”   
                                                 
6 The plats and deed were recorded among the Land Records of Dorchester County 
in Liber P.L.C. 149, folio 129 (Sheet 1), Liber P.L.C. 149, folio 130 (Sheet 2), and Liber 
P.L.C. 149, folio 131. 
7 H.B. Messenger, Jr., and his wife Esther White Messenger held title to the thirty-
five-acre parcel as tenants by the entireties.  Land Records of Dorchester County in Liber 
P.L.C. 174, folio 603.  H.B. Messenger, Jr. died on May 11, 1965.  Id. 
8 The deed was recorded among the Land Records of Dorchester County in Liber 
P.L.C. 243, folio 743. 
9 The subdivision plat was recorded among the Dorchester County Land Records, 
Plat Cabinet M.L.B. 46, p. 108B. 
 
7 
 
Significantly to this appeal, the Maryland Residential Contract of Sale, signed by 
the parties, contained a standard form fee-shifting provision, which stated: 
In any action or proceeding between the [Ochses] and the [Henrys] based in 
whole or in part, upon performance or no performance of the terms and 
conditions of this Contract, including, but not limited to, breach of contract, 
negligence, misrepresentation or fraud, the prevailing party in such action or 
proceeding shall be entitled to receive reasonable attorney’s fees from the 
other party as determined by the court arbitrator.   
 
The Contract of Sale further specified that “[t]he [attorney’s fees] provision . . . shall 
survive closing and shall not be deemed to have been extinguished by merger with the 
deed.”  
Ochse Property Title Search 
The Ochses received a policy of title insurance from Chicago Title, which 
guaranteed and represented that the Ochses’ property title was precisely as depicted in the 
1998 subdivision plat.  As an agent of Chicago Title, and for the benefit of the Ochses, 
ESTC performed the title search, prepared a title insurance binder and drafted the deed.  It 
is uncontested that the Ochses were the customers of ESTC and dealt directly with ESTC.  
The title search and title insurance binder were intended to “permit [the Ochses] to make 
an informed decision whether to proceed with the purchase.”10   
 
 
 
                                                 
10 Steven J. Ochse, et ux. v. Chicago Title Insurance Co., et al., Case No. 20-C-10-
007315, Docket No. 160 (Circuit Court for Talbot County June 12, 2013) (memorandum 
opinion and judgment). 
 
8 
 
Closing on the 2890 Mowbray Creek Road Property 
On December 14, 2001, at a real estate closing conducted by the general manager 
of ESTC, Veronica Wainwright, the Ochses acquired as tenants by entireties, via deed,11 a 
fee simple interest in 2890 Mowbray Creek Road.  The Ochses’ deed included a provision 
(the “driveway provision”) indicating that their property interest was “SUBJECT, 
HOWEVER, to the rights of others legally entitled to the use of a ‘Driveway’, for purpose 
of ingress, egress and regress, over [the Ochse Property].” 
At a subsequent trial proceeding, the Ochses testified that they asked Ms. 
Wainwright about the meaning of the provision’s language during the closing, and that she 
verbally advised the Ochses that the driveway provision referred to utility easements, with 
the utility companies being the unidentified “others” in the provision.12  
Discovery of Ochses’ Property Title Defect  
After residing at the property for four years, the Ochses hired a contractor in 2005 
to undertake significant renovations and landscaping to their home.  Based upon an inquiry 
from the contractor and prior to finalizing the renovation plans, Ms. Ochse reviewed the 
property deed to determine whether the gravel roadbed could be removed and contacted 
ESTC for clarification.  In response to Ms. Ochse’s questions, ESTC performed a second 
title search.  This second title search again failed to uncover the 1919 county road deed.  
                                                 
11 The deed was recorded among the Land Records of Dorchester County in Liber 
M.L.B. 468, folio 385.  
12  Ms. Wainwright testified that she did not so advise the Ochses. 
 
9 
 
Based on this second attempt, ESTC offered a new theory that the “driveway provision” in 
the Ochses’ deed was not for utility easements, as originally represented to the Ochses at 
closing, but instead a right-of-way for the benefit of the Henry property.  ESTC offered to 
prepare a release for the Henrys’ signature to quitclaim any and all rights and eliminate the 
driveway provision from the Ochses’ deed.  However, when presented with the draft 
release, the Henrys would not agree to sign it or to relinquish their claims to any right-of-
way over the Ochses’ property.   
The Ochses subsequently wrote a letter to their title insurer, Chicago Title, alerting 
the insurer to the presence an “undisclosed right of-way” that they contended ESTC had 
either “failed to pick up on” during the course of the title search, or failed to list in their 
Owners Policy.  In the letter, the Ochses requested that Chicago Title “initiate a claim on 
[their] behalf against Eastern Shore Title Company.”  Chicago Title denied the claim, 
referring to a portion of the Ochses policy that excepted from coverage “easements . . . and 
other limitations” shown on the 1998 subdivision plat.  The Ochses subsequently retained 
an attorney who continued to pursue obtaining a release from the Henrys, but without 
success.13 
B. Procedural History 
The Henry Litigation 
Consequently, on December 11, 2007, the Ochses filed a complaint against the 
Henrys in the Circuit Court for Dorchester County (“the circuit court”) seeking reformation 
                                                 
13 During the course of these further conversations with the Henrys, the Ochses’ 
counsel was alerted to the possibility that a public road may exist on the property.  The 
 
10 
 
of their deed and for declaratory, injunctive, and related relief.  The Ochses sought damages 
for breach of contract, breach of special warranties, and fraud in the inducement based on 
the driveway provision in their deed.   
Thereafter, on February 22, 2008, seven years after purchasing the 2890 Mowbray 
Creek Road property, the Ochses finally learned of the true legal status of the gravel 
roadbed—which up until that time they had presumed was, as stated in their deed, a 
driveway within property which they owned and over which some others merely had rights-
of-way—when an attorney representing the Henrys mailed a letter to the Ochses’ counsel 
revealing the existence of the 1919 county road deed, and Dorchester County’s ownership 
of the county road.  Then, the Henrys’ attorney mailed a second letter to the Ochses’ 
counsel stating that the Ochses’ only remedy was to petition Dorchester County to convey 
the county road to the Ochses and that any judgment against the Henrys was fruitless 
because they could not deliver title for the roadbed to the Ochses.   
Instead, on April 11, 2008, the Ochses filed an amended complaint, in which they 
added Dorchester County as an interested party defendant, while maintaining the same 
claims as in their earlier complaint: reformation of the deed, declaratory relief, injunctive 
relief, and damages for breach of contract, breach of special warranties, and fraud in the 
inducement.  The amended complaint requested the circuit court to remove the driveway 
provision from the Ochses’ deed, and to declare that Dorchester County did not have a fee 
                                                 
Ochses then contacted Dorchester County to determine if a nearby road ending in Caroline 
County extended onto their property, and were informed that Dorchester County was not 
responsible for that road. 
 
11 
 
simple interest in the county road.  The Henrys thereafter filed a counterclaim seeking an 
award of attorney’s fees pursuant to the fee-shifting provision of the Contract of Sale that 
specifically survived merger with the deed.  
On May 13, 2008, Dorchester County filed an answer to the Ochses’ amended 
complaint and asserted its fee simple interest in the county road.  On August 4, 2008, 
Dorchester County filed a motion for summary judgment asserting that there was no 
dispute of material fact regarding Dorchester County’s ownership of the county road, 
including that portion of it described as a “driveway” in the Ochses’ deed.  Dorchester 
County asserted that it did not abandon, convey away, or otherwise dispose of its interest 
in the county road.  On October 29, 2008, after a hearing, the circuit court granted 
Dorchester County’s motion for summary judgment declaring that Dorchester County 
owned the thirty-foot-wide strip of land in fee simple.   
The circuit court subsequently held a two-day bench trial, on May 26 and 27, 2009, 
as to the surviving claims made in the Ochses’ amended complaint, as well as the Henrys’ 
counterclaim for attorneys’ fees pursuant to the fee-shifting provision in the Contract of 
Sale.  Ultimately, in a written opinion and order entered September 18, 2009, the circuit 
court denied relief to the Ochses, “conclud[ing] that the [Contract of Sale] merged into the 
deed and that there was no breach of the special warranties of title.”  Ochse 1, 202 Md. 
App. at 528.  The circuit court, however, granted the Henrys’ counterclaim, and 
 
12 
 
subsequently, in a supplemental order entered on October 20, 2009, awarded the Henrys 
$100,020.00 in attorney’s fees14 to be paid by the Ochses.  
The Ochses appealed all of the circuit court’s judgments to the Court of Special 
Appeals.  Ochse 1, 202 Md. App. at 521.  The Ochses also filed a petition with the County 
Council for Dorchester County, requesting that the county close, abandon, and convey to 
them the portion of the county road lying across their property.15  E. Shore Title Co., 2015 
WL 9590716, at *6.  Following court-ordered mediation before the Court of Special 
Appeals, the parties filed a consent motion to stay proceedings before that court pending 
the disposition of the petition by Dorchester County.  After that petition was granted 
through a bill passed by the Dorchester County Council, “the county conveyed its interest 
in the 30-foot wide strip to the Ochses” through a quit-claim deed.16  Ochse 1, 202 Md. 
App. at 525.  Dorchester County was then dismissed from the Court of Special Appeals 
case.   
                                                 
14 The parties stipulated at trial that the attorney’s fees were reasonable.   
15 Oddly, at this juncture Chicago Title retained counsel to represent the Ochses in 
the petition.  E. Shore Title Co., 2015 WL 9590716, at *6 n.10.  Chicago Title took the 
position that Dorchester County’s ownership of the driveway was a matter covered under 
their title insurance policy.  Id.  As previously noted, Chicago Title had previously refused 
to represent the Ochses in any litigation against the Henrys, and would not reimburse the 
Ochses for attorney’s fees incurred in that litigation, taking the position that the litigation 
against the Henrys was prompted by the 1998 plat’s implication of a driveway that had 
been disclosed to the Ochses or by the Ochses’ own choice.  Id. 
16 The Quit Claim Deed was recorded among the Land Records of Dorchester 
County in Liber D.L.P. 996, folio 468. 
 
13 
 
The Court of Special Appeals then proceeded to review the circuit court’s judgments 
to deny the Ochses’ breach of contract, breach of special warranties, and fraud in the 
inducement claims, and to grant the Henrys’ attorney’s fees counterclaim.  The 
intermediate appellate court determined that the circuit court did not err in its conclusions 
that the Henrys had neither breached the special warranties of encumbrance or of title, nor 
fraudulently induced the Ochses into entering the Contract of Sale.  Id. at 530-42.  But, the 
Court of Special Appeals also determined that there was a mutual mistake between the 
Henrys and Ochses and, therefore, the Contract of Sale did not merge into the deed, “and 
the Ochses should have been able to sue on the contract.”  Id. at 542-43.17  The intermediate 
appellate court held, however, that the central issue underpinning the Ochses’ suit against 
the Henrys based upon the Contract of Sale—the issue of clear title to the Ochses’ 
property—had been “resolved” by the successful petition to the Dorchester County Council 
and resultant quitclaim deed to the thirty-foot wide strip of land to the Ochses.  Id. at 543. 
As to the issue of attorney’s fees, the Court of Special Appeals held that, despite its 
finding that there was a mutual mistake of fact that prevented the Contract of Sale from 
merging into the deed, “the circuit court was acting within the terms of the contract and 
deed by awarding attorney’s fees,” because “[r]egardless of whether the contract merged 
with the deed, the attorney’s fees provision of the contract survived.”  Id. at 544.  But, the 
                                                 
17 The Court of Special Appeals held that the Ochses had not pleaded a claim of 
mutual mistake at the trial level, but nevertheless had preserved that claim for appellate 
review by arguing it orally during the trial proceedings before the Circuit Court for 
Dorchester County.  Id. at 542. 
 
14 
 
Court of Special Appeals felt that, in light of its holdings, the apportionment of legal fees 
to the Henrys was in error.  Id.  The intermediate appellate court explained that “at the time 
of the conveyance [of the 2890 Mowbray Creek Road property], the Henrys did not convey 
marketable title to the Ochses, breaching the [Contract of Sale].”  Id.  Therefore, the Court 
of Special Appeals vacated the attorney’s fees award to the Henrys and remanded the case 
to the circuit court.  Id.     
The Court of Special Appeals’ holdings in Ochse 1 that the fee-shifting provision 
survived and the Henrys had breached the Contract of Sale meant that the Ochses were the 
“prevailing party” in the litigation and, pursuant to the fee-shifting provision, entitled to 
“receive reasonable attorney’s fees from the other party.”  See id. at 526 n.2 (noting that 
“[b]ecause the [Contract of Sale] contained an attorney’s fees provision, the Ochses are 
entitled to attorney’s fees,” and that even though the title issues had been resolved in favor 
of the Ochses through the county petition process, the circuit court “must view the case as 
it appeared when initiated” in issuing that award).  Consequently, after the case was 
remanded to the circuit court, the Ochses filed, on January 24, 2012, a motion requesting 
attorney’s fees to be awarded in the amount of $333,354.00 for the attorney’s fees incurred 
through the litigation to that point.  Ochse 2, 216 Md. App. at 449.  On April 27, 2012, the 
Ochses filed a supplemental motion for fees that reflected the additional costs incurred in 
their certiorari petition to this Court,18 which revised the total to $355,731.78.  Id.   
                                                 
18 The petition for a writ of certiorari was denied on April 23, 2012.  Henry v. Ochse, 
425 Md. 396 (2012). 
 
15 
 
On July 16, 2012, the circuit court issued an order and opinion granting attorney’s 
fees to the Ochses.  Id.  The circuit court explained that, because the Ochses had 
“prevail[ed] on some issues in [the] case but [did] not prevail on other issues,” it had 
concluded that a “proportionate award” was appropriate.  Id. at 453.  Specifically, the 
circuit court noted that “the substantial majority of the time in trial and litigation effort put 
forth by [the Ochses] addressed the issue of willful fraud,” an issue on which they did not 
prevail in their appeal in Ochse 1.  Id. at 453.  The circuit court concluded that the 
appropriate “proportionate award” was “the entirety of the post-trial and appeal costs, as 
well as one-fourth of the attorney’s fees expended in trial.”  Id. at 454.  Therefore, starting 
from the Ochses’ initial request of $333,354.00, the circuit court deducted $114,731.40 (its 
calculation of three fourths of the attorney’s fees through the trial), as well as $2,912.00 
(which it determined to be a double entry in the Ochses’ motion for fees), to reach an award 
of $215,710.60.  In its opinion and order, the circuit court made no mention of the Ochses’ 
April 27, 2012 supplemental motion for fees.  Id. 
The Ochses again appealed to the Court of Special Appeals—this time challenging 
the rationale of the circuit court’s judgment concerning the award of attorney’s fees.  Id. at 
449.  The Court of Special Appeals rejected the Ochses’ claim that they were entitled to 
the full amount of fees claimed pursuant to the “common core of facts” doctrine, under 
which a court may award “a fully compensatory fee where an attorney may not have 
prevailed on each and every claim or defense but still has achieved excellent results.”  Id. 
at 459.  The intermediate appellate court noted that it had previously recognized that the 
“common core of facts” doctrine “comports with Maryland law,” but had not held that its 
 
16 
 
application was mandatory.  Id. at 467 (discussing Weichert Co. of Md. v. Faust, 191 Md. 
App. 1 (2010), aff’d on other grounds, 419 Md. 306 (2011)).  The Court of Special Appeals 
noted that the circuit court “did not view the Ochses’ first appellate victory as an excellent 
result” and held that the circuit court “was free to consider,” as part of its overall 
determination as to attorney’s fees, “the thin relationship between the Ochses’ appellate 
success and the thrust of their efforts at trial.”  Id. at 468-69.  The Court of Special Appeals 
therefore held that the circuit court did not abuse its discretion in using its “proportionate 
award” approach to calculate attorney’s fees instead of relying on the “common core of 
facts doctrine.”  Id. at 469.  However, the Court of Special Appeals remanded the case for 
the circuit court to correct computational errors and to consider the Ochses’ supplemental 
motion for fees, which the circuit court had overlooked.  Id.  On remand, the circuit court 
recalculated its award for attorney’s fees and awarded a total of $228,771.89 in attorney’s 
fees to the Ochses.   
ESTC Litigation 
While the Henry litigation was still progressing through the courts, the Ochses filed 
a complaint against ESTC and Chicago Title on June 25, 2010 in the Circuit Court for 
Talbot County (“the trial court”).  In that complaint, the Ochses alleged breach of contract 
against Chicago Title, and breach of contract, negligence, and negligent misrepresentation 
against ESTC, all stemming from the improper preparation of the Ochses’ deed and failure 
to discover the 1919 deed.  The Ochses subsequently filed an amended complaint on July 
 
17 
 
29, 2011 that added negligence and negligent misrepresentation claims against Chicago 
Title. 
The case proceeded to a four-day bench trial beginning on July 9, 2012.  At that 
trial, the circumstances surrounding the faulty title search were revealed.  William Price 
was the title abstractor who performed the title search on the property at 2890 Mowbray 
Creek Road on behalf of ESTC.  Mr. Price testified that he searched deeds in the chain of 
title back to 1902, and that, in his title abstract forwarded to ESTC settlement staff, he had 
alerted ESTC to the possible existence of a right-of-way running through the property.  
However, Mr. Price also testified that he had reviewed the 1966 plats in the Ochses’ chain 
of title that noted a “county road” but found them not pertinent to his title search, and had 
skipped a search of the Grantor Index forward from 1902 that he conceded would have 
uncovered the 1919 deed that showed the existence of a county road on the property.  The 
Ochses presented expert testimony that, under the circumstances, the 1919 deed should 
have been discovered and disclosed to the Ochses. 
At the conclusion of the Ochses’ case, the trial court granted a motion for judgment 
on behalf of both Chicago Title and ESTC as to the negligent misrepresentation counts, 
finding that they were barred by the statute of limitations.  Then, on June 12, 2013, the trial 
court issued a memorandum opinion and judgment as to the remaining claims in the case.  
The trial court began that opinion by tracing what it described as the “peculiar and 
extraordinary route” of the litigation stemming from the failure to detect the 1919 county 
road deed and the 30-foot wide public road running across the 2890 Mowbray Creek Road 
property prior to the Ochses’ purchase of that property.  The trial court first summarized 
 
18 
 
the course of the Henry litigation before the Circuit Court for Dorchester County, in which 
the Ochses had pursued declaratory relief against the Henrys and Dorchester County to 
gain clear title to the 30-foot wide strip of land.  The trial court then described the ESTC 
litigation pending before it, in which the Ochses pursued breach of contract and negligence 
claims against ESTC and Chicago Title for failing to alert the Ochses to the presence of 
the county road across the 2890 Mowbray Creek Road property, a failure that the Ochses 
alleged caused them to have incurred significant attorney’s fees in the Henry litigation to 
obtain clear title to their property.   
As to the specific claims before it, the trial court concluded that Chicago Title could 
not be held vicariously liable for any negligence of its title searcher agent, ESTC, and 
therefore dismissed the negligence count against Chicago Title.  However, the trial court 
found in favor of the Ochses as to all remaining counts.  The court determined that Chicago 
Title breached its contract with the Ochses because “Chicago Title refused to act or provide 
a defense” during the initial course of the Henry litigation, as well as because “Chicago 
Title, through its agent [ESTC] failed to address the unresolved ‘driveway’ issue.”  The 
trial court also held that ESTC was negligent because it had “breached the standard of care 
in its title examination” by not discovering the 1919 county road deed and that, even though 
the county road was not in use at the time of the Henry litigation, that breach was 
“significantly damaging” to the Ochses, as the cloud in title would have been a major 
constraint on their ability to sell or develop the property.  Finally, the trial court concluded 
that ESTC’s failure to discover the 1919 deed had also breached its contractual obligation 
 
19 
 
to the Ochses to prepare the title search and title insurance binder so that the Ochses’ could 
make an informed decision as to whether to purchase the property.  
Turning to the issue of damages, the trial court determined that the Ochses were not 
entitled to noneconomic damages, but awarded economic damages based upon the 
attorney’s fees and costs the Ochses had incurred.  The trial court entered judgment for the 
breach of contract claims against Chicago Title and awarded $471,947 to the Ochses for 
that claim, which the court broke down into $256,237.35 in expenses in the case before it, 
as well as $215,710.60 in attorney’s fees for the Henry litigation.  The trial court also 
entered judgment for the breach of contract and negligence claims against ESTC, and 
awarded $215,710.60 to the Ochses as to those claims.  The $215,710.60 amount was, as 
the court noted, the amount that the Circuit Court for Dorchester County had determined 
that “the Ochses were entitled for the Henry litigation.”  Although relying on that amount, 
the Circuit Court for Talbot County also stated that the judgment from the Circuit Court 
for Dorchester County was at that time on appeal, implicitly recognizing that the amount 
was subject to change. 
On June 18, 2013, ESTC and Chicago Title filed a motion to alter or amend the 
judgment and a motion to stay enforcement, seeking a clarification that the damages would 
be reduced by any recovery made by the Ochses in the Henry litigation.  ESTC and Chicago 
Title attached the Henrys’ motion to record satisfaction of money judgment filed in the 
Henry litigation on June 13, 2013, documenting that the Henrys had paid $218,901.89 to 
 
20 
 
the Ochses.19  On June 28, 2013, the trial court granted ESTC and Chicago Title’s motion 
and reduced the judgment in the instant case against both ESTC and Chicago Title by the 
$215,710.60 paid by the Henrys in the Henry litigation.  As a result, the judgment against 
ESTC was reduced to $0.00, and the judgment against Chicago Title was reduced to 
$256,237.35. 20  The trial court’s order stated:  
Assuming the motion is approved by the Circuit Court for Dorchester County 
in the Henry litigation, the judgments in the instant litigation will be reduced 
[or otherwise satisfied] against Chicago Title and ESTC by $215,710.65.  
While presently the “satisfaction” would satisfy the judgment amount against 
ESTC as of the judgment date, i.e. June 12, 2013, that is subject to change 
due to the ongoing appeal by plaintiffs of the attorney’s fees award in the 
Henry litigation.  The Henrys understand, and defendants in the instant case 
should also, that “. . . any additional fees assessed pursuant to the August 8, 
2012 appeal would constitute a supplemental judgment.”  
 
The Court will enter the orders for clarification of the judgments against 
Chicago Title and ESTC, reducing each judgment by the amount of recovery 
in the Henry litigation.     
 
                                                 
19 Although unclear from the record, the difference between the $218,901.89 
amount paid and the $215,710.60 judgment likely reflects post-judgment interest.  See 
Maryland Rule 2-604 (“a monetary judgment shall bear interest at the rate prescribed by 
law from the date of entry”); Maryland Rule 11-107 (providing that, generally, “the legal 
rate of interest on a judgment shall be at the rate of 10 percent per annum on the amount of 
judgment”). 
20 In the four-day trial before the Talbot County circuit court, the Ochses introduced 
into evidence the contract appointing ESTC as an agent of Chicago Title that was in effect 
at the time of the title insurance search conducted by ESTC in this case.  That contract 
contains a provision that ESTC “shall be liable to and agrees to indemnify [Chicago Title] 
for all attorney’s fees, court costs, expenses and loss or aggregate of losses resulting from 
. . . [e]rrors and/or omissions in the abstracting or examination of title by [ESTC] or 
[ESTC’s] employees and/or subcontractors . . .”  Thus, even though the judgment against 
ESTC was reduced to $0.00, it may still be liable to Chicago Title for some or all of the 
remaining $256,237.35 judgment assessed against Chicago Title through its agency 
agreement.  
 
 
21 
 
(Footnote and citation omitted.) 
 
The Ochses and ESTC appealed the trial court’s judgment to the Court of Special 
Appeals.  E. Shore Title Co., 2015 WL 9590716, at *1.  In an unreported opinion, the Court 
of Special Appeals remanded the case to the trial court to determine whether the collateral 
litigation elements were satisfied and to determine whether the collateral source rule 
applied.  Id. at *2.  The Ochses and ESTC petitioned this Court for a writ of certiorari, 
which this Court granted.  448 Md. 29 (2016).  We have rephrased their questions.21 
ESTC presents the following question for our review:  
1. Does the collateral litigation doctrine permit a party to recover their 
attorney’s fees as “damages”? 
 
The Ochses raise the following questions for review: 
1. Did the Circuit Court for Talbot County err in its calculation of damages 
awarded pursuant to the collateral litigation rule?  
 
2. Does the collateral source rule apply to an award of attorney’s fees as 
damages when they are awarded pursuant to the collateral litigation doctrine? 
 
II 
Discussion 
                                                 
21 ESTC’s question presented was “May a party recover their attorney’s fees for the 
exact same matter more than one time as ‘damages’, even in separate cases?”   
The Ochses presented two questions:  
1. Did the trial court and the Court of Special Appeals err in the legal standard 
used to determine the correct amount of the damages awarded pursuant to 
the collateral litigation rule for legal expenses incurred?  
2. Does the collateral source rule apply to an award of damages for the breach 
of two separate contracts involving different parties under different 
circumstances in different courts, where separate consideration was paid for 
each contract?   
 
22 
 
A. Standard of Review 
The standard of review for a non-jury trial is governed by Maryland Rule 8-131(c), 
which states:  
When an action has been tried without a jury, the appellate court will review 
the case on both the law and the evidence.  It will not set aside the judgment 
of the trial court on the evidence unless clearly erroneous, and will give due 
regard to the opportunity of the trial court to judge the credibility of the 
witnesses. 
 
B. Collateral Litigation Doctrine  
The first issue this Court is asked to decide is whether the collateral litigation 
doctrine applies.  In their briefs and at oral argument, ESTC and the Ochses focused on the 
proximate cause element of the collateral litigation doctrine.22  ESTC asserts that the 
collateral litigation doctrine does not apply in this case because the Ochses did not present 
sufficient evidence to support the necessary elements for the collateral litigation doctrine, 
specifically that ESTC’s negligence proximately caused the Henry litigation.  The Ochses 
respond that the collateral litigation doctrine does apply, and permits attorney’s fees to be 
used as a measure of damages.  The Ochses contend that ESTC’s professional negligence 
                                                 
22 This is likely because the Court of Special Appeals remanded this issue to the trial 
court to make a factual determination on the record of whether ESTC’s wrongful conduct 
proximately caused the Ochses to initiate litigation against the Henrys, and if that conduct 
did, to what extent that litigation related to the injury caused by ESTC.   
 
23 
 
forced them into litigation with the Henrys to reform their property deed, which satisfies 
the proximate cause element of the collateral litigation doctrine.      
The trial court found that ESTC was negligent in exercising its duty of care to the 
Ochses, which arose from the contractual relationship between Chicago Title, ESTC, and 
the Ochses.  In 100 Investment Ltd. Partnership v. Columbia Town Center Title Co., 430 
Md. 197 (2013), this Court held that a title company owes a duty of care, in tort, when 
conducting a title search.  However, the issue of how to measure damages in the negligence 
action was not before the Court.        
A plaintiff in a negligence cause of action has the burden to demonstrate “1) that the 
defendant was under a duty to protect the plaintiff from the 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.”  Hamilton v. Kirson, 
439 Md. 501, 523-24 (2014) (quoting Taylor v. Fishkind, 207 Md. App. 121, 148 (2012)).  
Consequently, a trial court cannot award damages to a plaintiff unless the plaintiff shows 
that he or she suffered an actual injury.   
The Ochses’ theory of damages was that ESTC should be liable for the attorney’s 
fees from the Henry litigation pursuant to the collateral litigation doctrine.  In the trial 
court, the Ochses also sought “non-economic damages related to stress and other 
maladies.”  However, the trial court considered these damages as “wildly speculative and 
not consistent with the purely financial issues of the case.”  The Ochses do not challenge 
this finding on appeal. 
 
24 
 
When attorney’s fees are sought by a party, then “[o]ur basic point of reference 
when considering the award . . . is the bedrock principle known as the American Rule: 
Each litigant pays his own attorney’s fees, win or lose, unless a statute or contract provides 
otherwise.”  Baker Botts L.L.P. v. ASARCO LLC, 135 S. Ct. 2158, 2164 (2015) (quoting 
Hardt v. Reliance Standard Life Ins. Co., 560 U.S. 242, 252-53 (2010)).  The American 
Rule is rooted in “common law reaching back to at least the 18th century.”  Id.  (citing 
Arcambel v. Wiseman, 3 U.S. 306 (1796)).   
Maryland follows the American Rule.  Nova Research, Inc. v. Penske Truck Leasing 
Co., 405 Md. 435, 445 (2008); Friolo v. Frankel, 403 Md. 443, 456 (2008); see also St. 
Luke Evangelical Lutheran Church, Inc. v. Smith, 318 Md. 337, 344-46 (1990) (tracing the 
history of the American Rule).  However, in Maryland, there are four exceptions to the 
American Rule, and an award for attorney’s fees is permitted (1) where a statute allows for 
the recovery of attorney’s fees; (2) where the parties to a contract have an agreement 
regarding attorney’s fees; (3) where the wrongful conduct of a defendant forces a plaintiff 
into litigation with a third party; or (4) where a plaintiff in a malicious prosecution action 
can recover damages from the defense of the criminal charge.  Hess Constr. Co. v. Bd. of 
Educ., 341 Md. 155, 160 (1996).  The third exception is pertinent to this case, and is 
commonly known as the collateral litigation doctrine.     
The collateral litigation doctrine permits Maryland courts to award legal expenses 
as damages from a separate litigation against another party that was caused by the wrongful 
acts of the defendant.  Empire Realty Co. v. Fleisher, 269 Md. 278, 286 (1973).  The 
 
25 
 
collateral litigation doctrine was explained by this Court in McGaw v. Acker Merrall & 
Condit Co.:   
The general rule is that costs and expenses of litigation, other than the usual 
and ordinary Court costs, are not recoverable in an action for damages, nor 
are such costs even recoverable in a subsequent action; but, where the 
wrongful acts of the defendant has involved the plaintiff in litigation with 
others, or placed him in such relations with others as make it necessary to 
incur expense to protect his interest, such costs and expense should be treated 
as the legal consequences of the original wrongful act.  
 
111 Md. 153, 160 (1909); see also St. Luke Evangelical Lutheran Church, Inc., 318 Md. at 
345-46 (“[A]ttorney’s fees may be awarded when . . . the wrongful conduct of a defendant 
forces a plaintiff into litigation with a third party.”); Kromm v. Kromm, 31 Md. App. 635 
(“The allowance of such expenses manifestly was grounded on the fact that the wrong there 
complained of had imposed a necessary obligation upon the plaintiff to institute the 
collateral action[.]”), cert. denied, 278 Md. 726 (1976).   
Collateral litigation expenses are only recoverable “for legal services in a separate 
litigation against another party[,] which the wrongful act of the defendant had required,” 
and not the legal services rendered in the instant litigation.  Freedman v. Seidler, 233 Md. 
39, 47 (1963).  A plaintiff may recover collateral litigation expenses as damages by 
demonstrating that such expenses were the natural and proximate consequence of the injury 
complained of, were incurred necessarily and in good faith, and were a reasonable amount.  
See Fowler v. Benton, 245 Md. 540, 550 (1967).   
In this case, the Ochses are seeking to recover the attorney’s fees from a separate 
litigation, the lawsuit against the Henrys.  The trial court found that the Ochses sufficiently 
demonstrated that the wrongful act of ESTC, the negligent title search, required the Henry 
 
26 
 
litigation and that the attorney’s fees were a natural and proximate consequence of ESTC’s 
negligence.  The trial court found that ESTC’s title search was negligent because the 
Ochses’ deed included a drafting error by including the “12-foot driveway” that “ESTC 
questioned but never resolved.”  The trial court found that “ESTC never came up with the 
1919 deed, even though they [twice] searched the title, the first such search of the chain of 
title went back to 1902.  Internal memoranda of ESTC noted the concerns in December, 
2005, but were not conveyed to the Ochses or their representatives.”  Additionally, the trial 
court found that ESTC incorrectly advised the Ochses that the driveway language related 
to “utility easements,” when “the driveway was actually found to be part of the 30’ public 
roadway.”  Consequently, the trial court found that the wrongful act of ESTC required the 
Henry litigation because eventually there would have been an issue with the Ochses’ title, 
“particularly when the Ochses went to sell the property,” and the county road “greatly 
limited the Ochses’ use, development, marketability, and merchantability of the property.” 
Therefore, we hold that a remand on the issue of proximate cause is not necessary, 
because the trial court found that ESTC’s negligence required the Henry litigation in which 
the attorney’s fees were incurred.  However, our analysis does not end here.  We still must 
determine whether the Ochses have established the remaining elements of their negligence 
cause of action, based on the collateral litigation doctrine, against ESTC.  Specifically, we 
must determine whether the Ochses “suffered actual injury or loss.”  Kirson, 439 Md. at 
523-24 (quoting Taylor, 207 Md. App. at 148).  This consists of a two-part inquiry: 1) In 
determining the Ochses’ damages in this negligence action, did the trial court properly 
calculate the attorney’s fees incurred by the Ochses in the Henry litigation? and 2) Did the 
 
27 
 
trial court properly consider the Henrys’ satisfaction of those attorney’s fees to offset the 
Ochses’ damages?  We shall address each of these questions in turn. 
C. Calculation of Attorney’s Fees  
 
Next, we must determine whether the trial court, in determining the Ochses’ 
damages in their negligence action against ESTC, properly calculated the attorney’s fees 
incurred by the Ochses in the Henry litigation.  The Ochses assert that the damages were 
improperly calculated because the trial court took judicial notice of the attorney’s fees 
awarded in the Henry litigation instead of independently calculating the attorney’s fees 
based upon the evidence submitted by the Ochses in the instant case.  The Ochses also state 
that the lodestar method of calculating attorney’s fees should have been used, and that they 
should have been awarded a higher amount of attorney’s fees.  ESTC asserts that the 
damages awarded were unreasonable and improper.  In the alternative, ESTC contends that 
the trial court was permitted to consider the Henry litigation because the entire record was 
admitted as evidence in the instant case by stipulation.  The trial court found that the 
attorney’s fees in the Henry litigation were incurred necessarily and in good faith, and that 
the fees were reasonable.  We hold that the trial court did not abuse its discretion in equating 
the attorney’s fees incurred by the Ochses in the Henry litigation as the Ochses’ damages 
in its negligence action against ESTC.         
This Court has stated that “[d]ecisions concerning the award of counsel fees rest 
solely in the discretion of the trial judge.”  Petrini v. Petrini, 336 Md. 453, 468 (1994) 
(citing Jackson v. Jackson, 272 Md. 107, 111-12 (1974)).  “The trial court’s determination 
of the reasonableness of attorney’s fees is a factual determination within the sound 
 
28 
 
discretion of the court, and will not be overturned unless clearly erroneous.”  Myers v. 
Kayhoe, 391 Md. 188, 207 (2006).  Thus, “[a]n award of attorney’s fees will not be reversed 
unless a court’s discretion was exercised arbitrarily or the judgment was clearly wrong.”  
Petrini, 336 Md. at 468 (citing Danziger v. Danziger, 208 Md. 469, 475 (1955)).   
The collateral litigation doctrine permits the court to award as damages the legal 
fees from the separate litigation.  See Empire Realty Co., 269 Md. at 286.  As explained by 
the Supreme Court of Colorado, 
[L]itigation expenses and attorneys’ fees incurred by a party in one case may, 
in certain circumstances be an appropriate measure of damages against a 
third party in a subsequent action.  . . . “[W]hen the natural and probable 
consequence of a wrongful act has been to involve [a] plaintiff in litigation 
with others, the general rule is that the reasonable expenses of the litigation 
may be recovered from the wrongdoer.” 
 
Rocky Mountain Festivals, Inc. v. Parsons Corp., 242 P.3d 1067, 1071 (Colo. 2010) 
(second alteration in original) (citations omitted).  The doctrine applies when the plaintiff 
is “placed in a position of having to bring suit as plaintiff to defend his rights.”  Id. (quoting 
Elijah v. Fender, 674 P.2d 946, 951 (Colo. 1984)). 
The doctrine does not establish a stand-alone cause of action, nor is it an 
exception to the so-called American [R]ule that parties are responsible for 
their own litigation costs and fees.  Rather, the doctrine is but an 
acknowledgement that the litigation costs incurred by a party in separate 
litigation may sometimes be an appropriate measure of compensatory 
damages against another party. 
Id. (emphasis added) (footnotes and citations omitted). 
The Restatement (Second) of Torts defines “compensatory damages” as “the 
damages awarded to a person as compensation, indemnity or restitution for harm sustained 
 
29 
 
by him.”  Restatement (Second) of Torts § 903 (Am. Law Inst. 1979).23  Compensatory 
damages can be divided into “economic” and “noneconomic damages.”  The Restatement 
notes that “[c]ompensatory damages that will not be awarded without proof of pecuniary 
loss[, i.e. economic damages,] include compensation for (a) harm to property, (b) harm to 
earning capacity, and (c) the creation of liabilities.”  Id. at § 906.  In contrast, 
“[c]ompensatory damages that may be awarded without proof of pecuniary loss[, i.e. 
noneconomic damages,] include compensation (a) for bodily harm, and (b) for emotional 
distress.”  Id. at § 905. 
In this case, the Ochses sought both economic and noneconomic compensatory 
damages in their negligence action against ESTC.  The trial court found that the Ochses 
were not entitled to noneconomic damages, and the Ochses do not contest that finding on 
appeal.  However, regarding the economic damages, the Ochses assert that the trial court 
should have independently computed the attorney’s fees incurred in the Henry litigation 
based upon the evidence submitted by the Ochses in this case. 
The trial court calculated the Ochses’ economic damages against ESTC by taking 
judicial notice of the amount of attorney’s fees awarded by the circuit court in the Henry 
litigation: 
                                                 
23 Compensatory damages are in contrast to “nominal damages,” which are defined 
as “a trivial sum of money awarded to a litigant who has established a cause of action but 
has not established that he is entitled to compensatory damages,” Restatement (Second) of 
Torts § 907, and “punitive damages,” which are defined as “damages, other than 
compensatory or nominal damages, awarded against a person to punish him for his 
outrageous conduct and to deter him and others like him from similar conduct in the 
future.”  Restatement (Second) of Torts § 908. 
 
 
30 
 
With respect to economic damages, while the Ochses argue that this Court 
should not consider the judgment of $215,710.60, this Court believes it must 
do so.  Recognizing that the case is on appeal, the Circuit Court for 
Dorchester County determined this amount to be the amount to which the 
Ochses were entitled for the Henry litigation.  Consequently, judgment in the 
amount of $215,710.60 will be entered against ESTC and in favor of the 
Ochses on the negligence and breach of contract counts. 
 
Maryland Rule 5-201 permits trial judges to take judicial notice24 of adjudicative  
                                                 
24 Maryland Rule 5-201 states:  
(a) Scope of Rule.  This Rule governs only judicial notice of adjudicative 
facts.  Sections (d), (e), and (g) of this Rule do not apply in the Court of 
Special Appeals or the Court of Appeals. 
(b) Kinds of facts.  A judicially noticed fact must be one not subject to 
reasonable dispute in that it is either (1) generally known within the territorial 
jurisdiction of the trial court or (2) capable of accurate and ready 
determination by resort to sources whose accuracy cannot reasonably be 
questioned. 
(c) When discretionary.  A court may take judicial notice, whether requested 
or not. 
(d) When mandatory.  A court shall take judicial notice if requested by a 
party and supplied with the necessary information. 
(e) Opportunity to be heard.  Upon timely request, a party is entitled to an 
opportunity to be heard as to the propriety of taking judicial notice and the 
tenor of the matter noticed.  In the absence of prior notification, the request 
may be made after judicial notice has been taken. 
(f) Time of taking notice.  Judicial notice may be taken at any stage of the 
proceeding. 
(g) Instructing jury.  The court shall instruct the jury to accept as conclusive 
any fact judicially noticed, except that in a criminal action, the court shall 
instruct the jury that it may, but is not required to, accept as conclusive any 
judicially noticed fact adverse to the accused. 
 
31 
 
facts.25  This Court has stated, “Judicial discretion has been defined as ‘that power of 
decision exercised to the necessary end of awarding justice and based upon reason and law, 
but for which decision there is no special governing statute or rule[.]’”  Dashiell v. Meeks, 
396 Md. 149, 177 (2006) (quoting Jenkins v. College Park, 379 Md. 142, 164 (2003)).  In 
other words, “judicial discretion ‘is defined as the power of a court to determine a question 
upon fair judicial consideration with regard to what is right and equitable under the law 
and directed by reason and conscience to a just result.’”  Id. (quoting Schneider v. Hawkins, 
179 Md. 21, 25 (1940)).   
In reviewing a trial court’s exercise of judicial discretion, this Court will not find an 
abuse of discretion unless there is a “showing that a court acted in a harsh, unjust, 
capricious and arbitrary way.”  Id. at 178.  There was no such showing here.  Both parties 
stipulated to the admission of the entire Henry litigation.  The record includes all of the 
documents up to and including the petition for a writ of certiorari to this Court after the 
first appeal.  One of the few documents missing from the record of the Henry litigation was 
the trial court’s order and opinion awarding the Ochses attorney’s fees after this Court 
denied the petition.  Therefore, the trial court did not abuse its discretion by taking judicial 
notice of the Henry litigation attorney’s fees or by calculating the Ochses’ damages as 
equivalent to the reasonable attorney’s fees awarded in the Henry litigation.    
                                                 
25 An adjudicative fact is a fact “about the parties and their activities, businesses and 
properties.  They usually answer the questions of who did what, where, when, how, why, 
with what motive or intent[.]”  Dashiell v. Meeks, 396 Md. 149, 175 n.6 (2006) (quoting 
Montgomery County v. Woodward & Lothrop, Inc., 280 Md. 686, 711-12 (1977)). 
 
32 
 
Next, we address the Ochses’ argument that the trial court should have used the 
“lodestar method” of calculating attorney’s fees.  The lodestar method is a method of 
calculating attorney’s fees by “multiplying the number of hours reasonably spent pursuing 
a legal matter by a ‘reasonable hourly rate’ for the type of work performed.”  Monmouth 
Meadows Homeowners Ass’n v. Hamilton, 416 Md. 325, 333 (2010) (citing Hensley v. 
Eckerhart, 461 U.S. 424, 433 (1983), abrogated in part on other grounds, Gisbrecht v. 
Barnhart, 535 U.S. 789 (2002)).  “This amount is then adjusted by the court, depending on 
the effect of numerous external factors bearing on the litigation as a whole.”  Id.  The 
lodestar method is not used for all attorney’s fees awards and is “generally appropriate in 
the context of fee-shifting statutes.”  Id. at 334.  The lodestar approach has public policy 
goals and “is designed to reward counsel for undertaking socially beneficial litigation in 
cases where the expected relief has a small enough monetary value that other methods 
would provide inadequate compensation.”  Id. at 334-35 (quoting Krell v. Prudential Life 
Ins. Co. of Am., 148 F.3d 283, 333 (3d Cir. 1998)).   
The Henry litigation did not involve a fee-shifting statute, and therefore the lodestar 
method of calculation would not be appropriate.  See id. at 335.  The litigation arose from 
a dispute between private parties concerning a breach of contract, and does not represent a 
substantial threat to the public interest that would justify the application of the lodestar 
method.  See id. at 335-36.  Although the Contract of Sale did contain its own fee-shifting 
provision, the public policy underlying the use of the lodestar method in cases involving 
fee-shifting statutes is inapplicable to a fee-shifting provision contained within a real estate 
 
33 
 
contract between private parties.  Therefore, the trial court properly declined to use the 
lodestar method. 
Furthermore, because the collateral litigation doctrine requires the plaintiff to 
establish that the fees and expenses from the first litigation were incurred necessarily and 
in good faith, it was appropriate for the trial court to limit the Ochses’ damages to the 
amount of attorney’s fees awarded by the circuit court in the Henry litigation, rather than 
engage in its own independent calculation.  In the Henry litigation, the circuit court used 
the “proportionate award” approach to arrive at what it determined to be a reasonable fee, 
and entered judgment accordingly against the Henrys.  Although the Ochses asked for a 
greater amount, the circuit court determined that those additional fees were not reasonable.  
In this collateral litigation action, the Ochses essentially attempt to relitigate this point—
whether the fees awarded in the Henry litigation were reasonable.  We decline to second 
guess the reasonableness of attorney’s fees awarded in the Henry litigation when the 
Ochses have already argued this issue in their second appeal to the Court of Special 
Appeals, and we denied a request to grant a petition for certiorari from that appeal.  See 
Ochse 2, 216 Md. App. at 449, cert. denied, 439 Md. 331 (2014).  Because the circuit court 
in the Henry litigation determined that the additional fees requested by the Ochses, beyond 
those that it awarded, were unreasonable, it follows that those fees were not “incurred 
necessarily.”  Therefore, it was appropriate for the trial court in this case to limit its 
calculation of damages to the attorney’s fees awarded by the circuit court in the Henry 
litigation, because any other fees requested by the Ochses had already been declared 
unreasonable, and thus not “incurred necessarily.” 
 
34 
 
The Court of Special Appeals remanded this case to the trial court to clarify whether 
the Ochses’ damages were awarded for ESTC’s negligence or breach of contract.  
However, the trial court found that the contract gave rise to the tort “duty to[] accurately 
and completely report the state of the title in the property the Ochses were undertaking to 
purchase.”  It is clear from the record that the attorney’s fees were awarded pursuant to the 
negligence action, the duty of which arose from the contract.  This is supported by the trial 
court’s conclusion that the attorney’s fees were awarded for both the negligence and breach 
of contract action.  As we stated in 100 Investment Ltd. Partnership, “It is a settled and 
‘familiar proposition that not every duty assumed by contract will sustain an action 
sounding in tort.’”  430 Md. at 212 (quoting Mesmer v. Md. Auto. Ins. Fund, 353 Md. 241, 
252 (1999)).  “There are situations, however, when responsibilities imposed by a 
contractual relationship are supplemented with tort duties.”  Id.  (citing Jacques v. First 
Nat’l Bank of Md., 307 Md. 527, 534 (1986)).  Thus, a plaintiff can recover “in tort for 
economic losses caused by the negligent services of a professional.”  Id. at 228 (quoting 
Columbia Town Ctr. Title Co. v. 100 Inv. Ltd. P’ship, 203 Md. App. 61, 105 (2012) 
(Meredith, J., dissenting), rev’d, 430 Md. 197 (2013)).   
 
Therefore, we conclude that the trial court properly calculated the damages on the 
Ochses’ negligence claim by taking judicial notice of the attorney’s fees incurred 
necessarily and awarded by the circuit court in the Henry litigation, rather than 
independently calculating the attorney’s fees based on the evidence submitted by the 
Ochses. 
 
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D. Collateral Source Rule   
 
Finally, we must decide whether the collateral source rule applies in this case.  The 
trial court reduced the Ochses’ damages by the amount satisfied by the Henrys in the Henry 
litigation.  If the collateral source rule applies, then the trial court was not permitted to 
consider the Henrys’ satisfaction of the attorney’s fees in its award of damages to the 
Ochses.  But if the collateral source rule does not apply, and the trial court was permitted 
to consider the Henrys’ satisfaction, then the Ochses would be unable to establish one of 
the elements of the collateral litigation doctrine—namely, that their litigation expenses 
were “incurred necessarily”—and thus the Ochses would be unable to recover. 
The Ochses assert that the trial court was not permitted to consider the Henrys’ 
satisfaction because the Henrys are a collateral source and the collateral source rule 
precluded ESTC from presenting evidence of the Henrys’ satisfaction to offset ESTC’s 
liability in the instant case.  As a result, the Ochses contend that the trial court erred by 
reducing the Ochses’ damages by the amount of attorney’s fees satisfied by the Henrys in 
the Henry litigation.  ESTC responds that the collateral source rule does not apply because 
the Restatement (Second) of Torts limits collateral sources to four types of benefits 
received by a plaintiff—insurance policies, employment benefits, gratuities, and social 
legislation benefits.  See Restatement (Second) of Torts § 920A, cmt. c.  ESTC contends 
that the list in the Restatement is exhaustive, and the payment of attorney’s fees is not 
listed.   
The Maryland Association for Justice, Inc. (“MAJ”) submitted an amicus brief that 
disputes ESTC’s contentions.  MAJ states that ESTC’s position would carve out the first 
 
36 
 
exception to the collateral source rule.  MAJ asserts that attorney’s fees fall within the 
ambit of the collateral source rule, and that Maryland law allows tort victims to receive any 
potential windfall.   
“[T]he collateral source rule has been applied in this State to permit an injured 
person to recover in tort the full amount of his provable damages regardless of the amount 
of compensation which the person has received for his injuries from sources unrelated to 
the tortfeasor.”  Motor Vehicle Admin. v. Siedel Chevrolet, Inc., 326 Md. 237, 253 (1992).  
The collateral source rule is an English common law rule, Narayen v. Bailey, 130 Md. App. 
458, 466 (2000), and can be traced back in American jurisprudence to the United States 
Supreme Court’s decision in Propeller Monticello v. Mollison, 58 U.S. 152 (1854).  In 
Mollison, the tortfeasor asserted that it was not liable for damages because the plaintiff 
received satisfaction from its insurer.  Mollison, 58 U.S. at 155.  The Supreme Court held 
that the tortfeasor could not avail itself of the insurance compensation because “[t]he 
contract with the insurer [was] in the nature of a wager between third parties, with which 
the [tortfeasor] ha[d] no concern.”  Id.  Thus, the collateral source rule “permits an injured 
person to recover the full amount of his or her provable damages, ‘regardless of the amount 
of compensation which the person has received from his or her injuries from sources 
unrelated to the tortfeasor.’”  Lockshin v. Semsker, 412 Md. 257, 285 (2010) (quoting 
Haischer v. CSX Transp., Inc., 381 Md. 119, 132 (2004)).    
Maryland adopted the collateral source rule as early as 1899 in this Court’s opinion 
in Baltimore City Passenger Railway Co. v. Baer, 90 Md. 97 (1899).  See Motor Vehicle 
Admin., 326 Md. at 253-54 (tracing the history of the collateral source rule).  In Baltimore 
 
37 
 
City Passenger Railway Co., the Court stated that “sick benefits received by the plaintiff 
from any source other than the defendant were not to be considered by the jury in making 
up their verdict.”  Balt. City Passenger Ry. Co., 90 Md. at 108.     
In Maryland, the collateral source rule “generally prohibits presentation to a jury of 
evidence of the amount of medical expenses that have been or will be paid by health 
insurance.”  Lockshin, 412 Md. at 285 (citing Haischer, 381 Md. at 132).  “The purpose of 
the Collateral Source Rule is to preserve an injured party’s right to seek tort recovery from 
a tortfeasor without jeopardizing his or her right to receive insurance payments for medical 
care.”  Narayen, 130 Md. App. at 466 (citing Michael F. Flynn, Private Medical Insurance 
& the Collateral Source Rule: A Good Bet?, 22 U. Tol. L. Rev. 39, 41 (1990)).  The policy 
underlying the collateral source rule is to encourage “the maintenance of insurance.”  
Haischer, 381 Md. at 132.  Hence, the rule prevents a defendant from receiving the benefit 
of a plaintiff’s insurance, for which the plaintiff paid consideration through premiums.  
This Court has also barred evidence of disability and retirement benefits pursuant to the 
collateral source rule.  See CSX Transp., Inc. v. Pitts, 430 Md. 431, 473 (2013) (“[T]he 
collateral source rule bars evidence of disability and retirement benefits[.]”).   
However, the collateral source rule is not an absolute bar to the admissibility of 
evidence demonstrating payment by a third party.  The rule is applicable to tort cases and 
is generally not applied in contract cases.  Dennison v. Head Constr. Co., 54 Md. App. 310, 
321-22 (1983) (“[The collateral source rule] has generally been applied only to tort 
cases.”); see also Kremen v. Md. Auto. Ins. Fund, 363 Md. 663, 671-72 (2001); Seidel 
Chevrolet, Inc., 326 Md. at 253 (“[M]ost courts have restricted application of the [collateral 
 
38 
 
source] rule to tort litigation[.]”).  Additionally, the Restatement (Second) of Torts § 
920A(c) limits the collateral source rule to four types of benefits: 
The rule that collateral benefits are not subtracted from the plaintiff’s 
recovery applies to the following types of benefits: 
(1) Insurance policies, whether maintained by the plaintiff or a third party.  
Sometimes, as in fire insurance or collision automobile insurance, the 
insurance company is subrogated to the rights of the third party.  This 
additional reason for keeping the tortfeasor’s liability alive is not necessary, 
however, as the rule applies to insurance not involving subrogation, such as 
life or health policies. 
(2) Employment benefits.  These may be gratuitous, as in the case in which 
the employer, although not legally required to do so, continues to pay the 
employee’s wages during his incapacity.  They may also be benefits arising 
out of the employment contract or a union contract.  They may be benefits 
arising by statute, as in worker’s compensation acts or the Federal 
Employers’ Liability Act.  Statutes may subrogate the employer to the right 
of the employee, or create a cause of action other than by subrogation. 
(3) Gratuities.  This applies to cash gratuities and to the rendering of services.  
Thus the fact that the doctor did not charge for his services or the plaintiff 
was treated in a veterans[’] hospital does not prevent his recovery for the 
reasonable value of the services. 
(4) Social legislation benefits.  Social security benefits, welfare payments, 
pensions under special retirement acts, all are subject to the collateral-source 
rule. 
The Ochses contend that the collateral source rule should apply to this case.  
However, they do not cite any authority for the proposition that a fee-shifting provision in 
a real estate sales contract is analogous to the collateral benefits listed in the Restatement.  
Furthermore, the circumstances of this case are distinct from the insurance context, where 
application of the collateral source rule normally prevents a defendant from receiving the 
benefit of a plaintiff’s insurance for which the plaintiff paid consideration through 
premiums.  In this case, application of the collateral source rule would be inappropriate 
 
39 
 
because the Ochses did not pay separate consideration for the fee-shifting provision in their 
Contract of Sale with the Henrys. 
Therefore, we decline to extend the collateral source rule, which would preclude the 
consideration of the Henrys’ satisfaction of the same damages that the Ochses sought to 
recover in the instant case from ESTC.  The collateral litigation doctrine only permits the 
recovery of attorney’s fees actually incurred.  Thus, the trial court did not err by considering 
the satisfaction of the attorney’s fees by the Henrys pursuant to the fee-shifting provision 
in the Contract of Sale.  If the Henrys had not satisfied the attorney’s fees pursuant to the 
fee-shifting provision in the Contract of Sale, then the Ochses’ theory of damages would 
have sufficed.  But, the Ochses cannot take advantage of the fee-shifting provision in the 
Contract of Sale and of the collateral litigation doctrine to recover the same attorney’s fees.  
“The object of tort law is to, so far as possible with money, place the injured party in the 
position he would have been if no tort had been committed.  It is to provide full recompense 
but nothing more.”  Paducah Area Pub. Library v. Terry, 655 S.W.2d 19, 23 (Ky. 1983).  
In this case, the Ochses would be in a much better position than they were prior to ESTC’s 
negligent title search if they were permitted to recover the attorney’s fees that have already 
been satisfied.   
 
We hold that the trial court properly declined to apply the collateral source rule in 
this case, and did not err by reducing the damages awarded to the Ochses by the amount 
previously satisfied by the Henrys.  The Henrys’ satisfaction of the attorney’s fees from 
the Henry litigation eliminated the Ochses’ injury, because the fees were not “incurred 
necessarily.”  Accordingly, the Ochses are unable to establish one of the basic elements of 
 
40 
 
a negligence cause of action: “that the plaintiff suffered actual injury or loss.”  Kirson, 439 
Md. at 523-24 (quoting Taylor, 207 Md. App. at 148).  The Ochses would have been 
permitted to recover the attorney’s fees as damages in this collateral litigation action 
against ESTC but for the fee-shifting provision in the Contract of Sale and the Henrys’ 
satisfaction of the attorney’s fees pursuant to that provision.  In other words, if the Henrys 
had not satisfied the judgment for attorney’s fees in the Henry litigation, ESTC would have 
remained liable, under the collateral litigation doctrine, for the fees awarded in that 
litigation. 
III 
Conclusion 
 
For the reasons set forth above, we hold that a party may recover attorney’s fees 
actually incurred, as damages, pursuant to the collateral litigation doctrine, when the 
expenses were the proximate result of the complained-of injury, incurred necessarily and 
in good faith, and the amount is reasonable.  However, the plaintiff has the burden in any 
negligence action to demonstrate actual injury.  If a plaintiff seeks to recover attorney’s 
fees as damages pursuant to the collateral litigation doctrine, then the plaintiff must 
demonstrate that he or she actually incurred the attorney’s fees.  In this case, the Ochses 
 
41 
 
did not incur the attorney’s fees because the Henrys satisfied the attorney’s fees pursuant 
to the fee-shifting provision in the Maryland Residential Contract of Sale.   
Therefore, we reverse the judgment of the Court of Special Appeals and reinstate 
the trial court’s order with respect to the judgment concerning ESTC.26   
JUDGMENT OF THE COURT OF SPECIAL 
APPEALS REVERSED.  CASE REMANDED TO 
THAT 
COURT 
WITH 
INSTRUCTIONS 
TO 
REINSTATE THE JUDGMENT OF THE CIRCUIT 
COURT FOR TALBOT COUNTY.  COSTS TO BE 
PAID BY RESPONDENTS/CROSS-PETITIONERS.   
   
                                                 
26 As we noted above, Chicago Title is not a party to this appeal, and we express no 
opinion as to the correctness of the trial court’s order with respect to that party.