Hess Construction Co. v. Board of Education

651 A.2d 446, 102 Md. App. 736, 1995 Md. App. LEXIS 6
CourtCourt of Special Appeals of Maryland
DecidedJanuary 5, 1995
DocketNo. 692
StatusPublished
Cited by4 cases

This text of 651 A.2d 446 (Hess Construction Co. v. Board of Education) is published on Counsel Stack Legal Research, covering Court of Special Appeals of Maryland primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Hess Construction Co. v. Board of Education, 651 A.2d 446, 102 Md. App. 736, 1995 Md. App. LEXIS 6 (Md. Ct. App. 1995).

Opinion

CATHELL, Judge.

Appellant, Hess Construction Company (Hess), appeals from a judgment in favor of appellee, the Board of Education of Prince George’s County (the Board). The Circuit Court for Prince George’s County (Spellbring, Jr., J. presiding), in granting appellant’s petition for a writ of mandamus, ultimately declined to include appellant’s attorney’s fees as damages. We rephrase the question presented to us as:

Whether the trial court erred in not assessing appellant’s attorney’s fees against appellee under either (1) the provisions of Md.Rule BE44 or (2) the “collateral litigation” rule.

Facts

The parties, under an Agreed Statement of Facts, agreed below (and on appeal) that Hess was the apparent low bidder for the construction of a new elementary school in Prince George’s County, Maryland; that Columbia Construction Co., Inc., the next lowest bidder, complained that Hess’s bid was improper for various reasons; that, ultimately, the Board rejected all bids and planned to resolicit new bids; that Hess filed an action under Md.Rule BE40' for a writ of mandamus (as well as for other relief not pertinent to this appeal); that Columbia intervened in that action; that the trial court ruled in Hess’s favor and granted its request for a writ of mandamus; that the trial court initially granted Hess its attorney’s fees in the amount of $27,231.15; and that, thereafter, upon the Board’s objection, the trial court rescinded its previous order granting Hess’s attorney’s fees.

The Law

The General Rule

The general rule applicable in Maryland with respect to awarding attorney’s fees has been restated recently by the Court, of Appeals in a case in which a majority of that Court, [739]*739for the first time, permitted a jury to consider attorney’s fees in determining a punitive damage award. St. Luke Evangelical Lutheran Church, Inc. v. Smith, 318 Md. 337, 568 A.2d 35 (1990), was a defamation and invasion of privacy suit. The majority initially stated:

Any consideration of a common-law standard for awarding attorney’s fees must begin with the prevailing rule in this country. Known as the American Rule, it prohibits the prevailing party in a lawsuit from recovering his attorney’s fees as an element of damages. Alyeska [Pipeline Service Co. v. Wilderness Society], 421 U.S. [240,] 247, 95 S.Ct. [1612,] 1616, 44 L.Ed.2d [141,] 147 [ (1975) ]; Empire [Realty Co. v. Fleisher], 269 Md. [278,] 285, 305 A.2d [144,] 148 [ (1973) ]. A brief history of the American Rule reveals that it evolved from the English Rule, which originated some time before the reign of Edward I. At that time, a successful plaintiff could obtain the costs of litigation as an element of damages. See C. McCormick, Handbook on the Law of Damages 234, 235 (1935), relying on 2 F. Pollock & F. Maitland, The History of English Law 597 (2d ed. 1911).
Beginning with the reign of Henry VIII, this benefit was also extended to successful defendants. McCormick at 235. Consequently, the English Rule—which allows the successful party in a lawsuit to recover from the losing party the costs of litigation, including attorney’s fees—became firmly established in the English common-law courts. Id. The rule continues in England today. Alyeska, 421 U.S. at 245, 95 S.Ct. at 1616, 44 L.Ed.2d at 147-48 (1975); Goodhart, Costs, 38 Yale L.J. 849, 849 (1929).
The English Rule was popular in America before the Revolution. McCormick at 235. Originally, the pre-colonial statutes which fixed the scale of recoverable court costs satisfied a substantial portion of the attorney’s fees incurred by a successful litigant. Id.; Restatement {Second) of Torts § 914, comment a at 492 (1979). This was so even though local statutes rigidly limited the amount recoverable as attorney’s fees. McCormick at 235.
[740]*740Of course, nowhere in this country have statutorily-fixed attorney’s fees been revised to keep pace with the fall in the value of money. Id. at 236. Such legislative reluctance to keep pace suggests that the principle of full compensation for litigation expenses never firmly took hold in this country. Id. at 235-36. This may best be explained by a historic distrust of lawyers prevalent throughout the colonial era, and a then growing preference of the organized bar for fee schedules set by a free market and not hostile legislatures. Leubsdorf, Toward a History of the American Rule on Attorney Fee Recovery, 47 Law & Contemp.Probs. 9, 11, 19 (1984).
Nevertheless, there are exceptions to the American Rule. For example, in Maryland, attorney’s fees may be awarded when (1) parties to a contract have an agreement to that effect, Empire, 269 Md. at 286, 305 A.2d at 148, citing Webster v. People’s Loan, Savings & Deposit Bank, 160 Md. 57, 152 A. 815 (1931); (2) there is a statute which allows the imposition of such fees, Freedman v. Seidler, 233 Md. 39, 47, 194 A.2d 778, 783 (1963); or (3) the wrongful conduct of a defendant forces a plaintiff into litigation with a third party, McGaw v. Acker, Merrall & C. Co., 111 Md. 153, 160, 73 A. 731, 734 (1909). See also, Empire, 269 Md. at 286, 305 A.2d at 148; Fowler v. Benton, 245 Md. 540, 550, 226 A.2d 556, 563 (1967). Counsel fees may also be awarded when a plaintiff is forced to defend against a malicious prosecution. Tully v. Dasher, 250 Md. 424, 442, 244 A.2d 207, 217 (1968).

318 Md. at 344-46, 568 A.2d 35 (footnotes omitted). The majority of the Court then carved out a new (in Maryland) exception to the American Rule with respect to punitive damages. Judge Rodowsky, dissenting, writing for himself, Chief Judge Murphy and Judge McAuliffe, noted:

Philosophically the Court’s new rule, but for the label attributed to the additional recovery, does not involve punitive damages at all. Rather, it is a judicially adopted rule of fee shifting, contrary to this Court’s historic position of viewing fee shifting as the exercise of legislative or rulemaking power.

[741]*741Conceptually the question presented here is whether this Court, as a matter of decisional law, should adopt for cases in which punitive damages are awarded an exception to the American rule on counsel fees. For more than 165 years it has been settled in Maryland that fees between attorney and client are not, absent statute, awarded to the prevailing party and are not taxed as costs in the judgment. Nor are counsel fees awarded as damages, absent a contract so providing, or special circumstances. See Taylor v. Wahby, 271 Md. 101, 115-16, 314 A.2d 100, 107-08 (1974); Empire Realty Co. v. Fleisher, 269 Md. 278, 285-86, 305 A.2d 144, 148 (1973); New Carrollton v. Belsinger Signs, Inc., 266 Md. 229, 238, 292 A.2d 648, 652 (1972); Marney v. Stack, 261 Md. 78, 81, 273 A.2d 426, 428 (1971); Freedman v. Seidler, 233 Md. 39, 47, 194 A.2d 778, 783 (1963); Harry’s Thrifty Tavern, Inc. v. Pitarra, 224 Md.

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Bluebook (online)
651 A.2d 446, 102 Md. App. 736, 1995 Md. App. LEXIS 6, Counsel Stack Legal Research, https://law.counselstack.com/opinion/hess-construction-co-v-board-of-education-mdctspecapp-1995.