Hess Const. Co. v. Board of Educ. of Prince George's County

• Decision Date: 01 September 1995
• Docket Number: No. 37,37
• Parties: , 106 Ed. Law Rep. 733 HESS CONSTRUCTION COMPANY v. BOARD OF EDUCATION OF PRINCE GEORGE'S COUNTY. ,
• Court: Maryland Court of Appeals

Page 155

341 Md. 155

669 A.2d 1352, 106 Ed. Law Rep. 733

HESS CONSTRUCTION COMPANY v. BOARD OF EDUCATION OF PRINCE GEORGE'S COUNTY.

No. 37, Sept. Term, 1995.

Court of Appeals of Maryland.

Jan. 17, 1996.

William Karl Wilburn (Seyfarth, Shaw, Fairweather & Geraldson, on brief) Washington, DC, for Petitioner.

Maurice Baskin (Venable, Baetjer, Howard & Civiletti, on brief) Washington, DC, for Amicus Curiae.

Sheldon L. Gnatt (Reichelt, Nussbaum, LaPlaca & Miller, on brief), of Greenbelt, MD, for Respondent.

Argued before MURPHY, C.J., and ELDRIDGE, RODOWSKY, CHASANOW, KARWACKI, BELL and RAKER, JJ.

RODOWSKY, Judge.

Maryland Rules, Chapter 1100, "Special Proceedings," Subtitle BE, "Mandamus," Rule BE44, "Damages," provides:

"In an action brought pursuant to this Subtitle, the plaintiff shall have the right to claim and prove his damages, if any, and the court, in entering judgment that the writ of mandamus shall issue, may also award such damages to the plaintiff as he shall have proven."

The petition for certiorari in this case presents this question: "Is the Petitioner entitled to recover attorney's fees under Rule BE-44 or in actions for mandamus generally?" The Court of Special Appeals answered in the negative. Hess Constr. Co. v. Board of Educ. of Prince George's County, 102 Md.App. 736, 651 A.2d 446 (1995). We agree with the Court of Special Appeals for the reasons set forth below.

Respondent, The Board of Education of Prince George's County (the Board), in November 1993 issued a request for lump sum sealed bids for the construction of an elementary school in Laurel. Maryland Code (1978, 1992 Repl.Vol., 1995 Cum.Supp.), § 5-110(c)(1) of the Education Article (Ed.) required the Board to award the contract to "the lowest responsible bidder who conforms to specifications with consideration given to" certain enumerated factors. After bid opening the Board notified the petitioner, Hess Construction Company (Hess), that it was the lowest bidder and that the contract would be awarded to it at the next Board meeting. The next lowest bidder, however, challenged award of the contract to Hess, alleging that Hess's bid was nonresponsive to the bidding requirements. At its meeting in December 1993 the Board rejected all bids and determined to readvertise the entire project. ¹

Hess instituted the instant action against the Board in the Circuit Court for Prince George's County. The relief sought included a writ of mandamus and attorney's fees. The circuit court issued a preliminary injunction against resolicitation of bids on the project. Following a four day trial on the merits in February 1994, the circuit court entered judgment in favor of Hess, issuing a "mandamus" directing the Board to award the contract to Hess. The Board did not appeal from the judgment adverse to it.

In an oral opinion at the end of the trial the circuit court indicated that it intended to award attorney's fees to Hess, but the court deferred entering any order on that issue, pending briefing and further argument. In a legal memorandum to the circuit court Hess argued that "[i]n this case, the legislative authority for the award of attorneys' fees is set forth in Maryland Rule BE 44." The circuit court nevertheless concluded that it was "confined by the law," stating that "[t]he general rule in Maryland is that attorneys fees are not recoverable unless approved by statute or contract."

Hess appealed to the Court of Special Appeals. There Hess argued that "damages" as used in Rule BE44 included attorney's fees, based on history, certain decisions by other courts, and Maryland public policy. The Court of Special Appeals affirmed the circuit court. ²

The "American Rule" is that attorney's fees are ordinarily not recoverable by a prevailing party in a lawsuit. Alyeska Pipeline Serv. Co. v. Wilderness Soc'y, 421 U.S. 240, 247, 95 S.Ct. 1612, 1616, 44 L.Ed.2d 141, 147 (1975). "In Maryland, '[t]he general rule is that costs and expenses of litigation, other than the usual and ordinary Court costs, are not recoverable in an action for [compensatory] damages.' " Collier v. MD-Individual Practice Ass'n, 327 Md. 1, 11, 607 A.2d 537, 542 (1992) (quoting McGaw v. Acker, Merrall & Condit Co., 111 Md. 153, 160, 73 A. 731, 734 (1909)). Compare St. Luke Evangelical Lutheran Church, Inc. v. Smith, 318 Md. 337, 568 A.2d 35 (1990) (permitting counsel fees of prevailing party to be considered where punitive damages may be awarded).

Attorney's fees may be awarded where a statute allows for the imposition of such fees, Freedman v. Seidler, 233 Md. 39, 47, 194 A.2d 778, 783 (1963); Mercedes-Benz of North America, Inc. v. Garten, 94 Md.App. 547, 618 A.2d 233 (1993), and where parties to a contract have an agreement regarding attorney's fees. Empire Realty Co. v. Fleisher, 269 Md. 278, 286, 305 A.2d 144, 148 (1973) (citing Webster v. People's Loan, Savings & Deposit Bank, 160 Md. 57, 152 A. 815 (1931)). Where the wrongful conduct of a defendant forces a plaintiff into litigation with a third party, the plaintiff may recover from the defendant, as damages, reasonable counsel fees incurred in the action with the third party. McGaw, 111 Md. at 160, 73 A. at 734. See also Empire Realty Co., 269 Md. at 286, 305 A.2d at 148; Fowler v. Benton, 245 Md. 540, 550, 226 A.2d 556, 563, cert. denied, 389 U.S. 851, 88 S.Ct. 42, 19 L.Ed.2d 119 (1967); Bohle v. Thompson, 78 Md.App. 614, 639-40, 554 A.2d 818, 830-31, cert. denied, 316 Md. 364, 558 A.2d 1206 (1989). Additionally, a plaintiff in a malicious prosecution action, who has incurred counsel fees in the defense of the criminal charge, may be awarded those fees as damages in the civil action. Tully v. Dasher, 250 Md. 424, 442, 244 A.2d 207, 217 (1968); but cf. Solko v. State Roads Comm'n, 82 Md.App. 137, 153, 570 A.2d 373, 381, cert. denied, 320 Md. 222, 577 A.2d 50 (1990) (holding that attorney's fees are not "just compensation" in condemnation proceedings).

But exceptions are quite rare under Maryland common law to the general rule that counsel fees, incurred by the prevailing party in the very litigation in which that party prevailed, are not recoverable as compensatory damages against the losing party. The principal exception is for counsel fees incurred by an insured in successful litigation with a liability insurer which denied coverage or a duty to defend. See Nolt v. United States Fidelity & Guar. Co., 329 Md. 52, 617 A.2d 578 (1993); Bausch & Lomb Inc. v. Utica Mut. Ins. Co., 330 Md. 758, 790, 625 A.2d 1021, 1037 (1993); Collier, 327 Md. 1, 607 A.2d 537; Continental Casualty Co. v. Board of Educ. of Charles County, 302 Md. 516, 489 A.2d 536 (1985); Bankers & Shippers Ins. Co. v. Electro Enters., Inc., 287 Md. 641, 415 A.2d 278 (1980); Government Employees Ins. Co. v. Taylor, 270 Md. 11, 310 A.2d 49 (1973). In Collier we called this exception under Maryland common law an "anomaly." 327 Md. at 17, 607 A.2d at 544.

Consequently, the issue before us is whether the "damages" referred to in Rule BE44 contain an additional exception to the American Rule by including counsel fees, either because Rule BE44 authorizes that award or because the award of counsel fees to the prevailing party is an inherent aspect of the common law of mandamus.

I

Hess seeks to structure an argument based on history. The interesting, although somewhat obscure, history of mandamus procedure is basically irrelevant to the issue before us. We point out that Hess does not cite any Maryland judicial precedent, from the founding of the colony to date, or any pre-American Revolution English judicial decision awarding counsel fees as damages in a mandamus case to a prevailing plaintiff. ³ In order to present Hess's argument and the disposition thereof by the Court of Special Appeals, we shall divide the historical background into four periods: (1) early common law (pre-1711), (2) 1711 to 1858, (3) 1858 to 1959, and (4) 1959 to date.

The early procedure in mandamus was described in Ipes v. Board of Fire Comm'rs of Baltimore, 224 Md. 180, 167 A.2d 337 (1961).

"At common law the pleading and practice in mandamus proceedings were very tedious and technical. Upon the filing of a petition which set forth sufficient facts, the court directed the writ to issue. This writ commanded the respondent to do the thing ordered, or to show cause, by a time certain, why he should not be required to do it. This was termed an alternative writ of mandamus; and, if the respondent wished to contest the matter, he either moved to quash the writ (for defects either of form or substance), or replied to it. This reply was called a 'return.' Upon the sufficiency of this return, the relator's right to the writ depended. In this return, the respondent was obliged to set forth with great care, certainty and precision the facts upon which he relied to defeat the petition, and on the case thus made the court decided the matter. The petitioner, or relator, was not allowed to traverse the facts stated in the return, and, if matters stated therein were not true, the only remedy of the petitioner was an action on the case for a false return; and then, after a verdict and judgment for him in such case, the application for the mandamus could be renewed, and the writ was generally issued."

Id. at 184, 167 A.2d at 339-40. See also Harwood v. Marshall, 10 Md. 451, 463-65 (1857); Brosius v. Reuter, 1 H. & J. 551, 557 (1805); 2 J. Poe, Pleading and Practice in Courts of Common Law § 711 (5th Tiffany ed. 1925).

Legislative modification of the ancient procedure began in 1711 with the statute of 9 Anne ch. 20, the application of which was limited to mandamus to try title to certain municipal offices. Alexander describes the procedural modification:

"The Statute provided that a return should be made to the first writ of mandamus, and ... gave the power of traversing the return in the place of an action for a false return. The latter action, however, was not taken away, for the...