Court: Court of Appeals of Maryland; January 17, 1996; Maryland; State Supreme Court
Maryland Rule BE44 permits plaintiffs in mandamus actions to claim and prove damages, with the court having the discretion to award proven damages when issuing the writ. The legal question presented is whether the petitioner, Hess Construction Company, can recover attorney’s fees under this rule or in general mandamus actions. The Court of Special Appeals, referencing Hess Constr. Co. v. Board of Educ. of Prince George’s County, ruled negatively, aligning with the general Maryland principle that attorney’s fees are not recoverable unless explicitly authorized by statute or contract.
In this case, the Board of Education of Prince George’s County initially informed Hess it was the lowest bidder for a construction contract but later rejected all bids in response to a challenge regarding Hess's bid compliance. Hess sought a writ of mandamus and attorney’s fees in the Circuit Court, which ruled in favor of Hess but deferred the attorney’s fee decision, ultimately determining that the law did not support Hess's claim for fees under Rule BE44. The Court of Special Appeals affirmed this decision, citing the "American Rule" that typically denies recovery of attorney’s fees to the prevailing party, with exceptions only for statutory or contractual provisions.
In Maryland, attorney’s fees may be awarded to the prevailing party in specific circumstances, such as when punitive damages are involved (St. Luke Evangelical Lutheran Church, Inc. v. Smith). Fees can also be awarded if a statute allows it, if there is a contractual agreement, or if the plaintiff incurs fees due to the wrongful conduct of a defendant that forces litigation with a third party (McGaw). A plaintiff in a malicious prosecution case may recover defense fees as damages (Tully v. Dasher), but exceptions to the general rule that fees cannot be claimed as compensatory damages are rare. One notable exception allows insured parties to recover fees when successfully litigating against insurers that denied coverage (Nolt v. United States Fidelity, Guar. Co.). The text raises a question regarding whether Rule BE44 includes an exception for counsel fees under the common law of mandamus, but notes that Hess fails to provide relevant Maryland or historical precedent supporting such an award in mandamus cases.
Hess's argument is contextualized within four historical periods regarding mandamus procedure: 1) early common law (pre-1711); 2) 1711 to 1858; 3) 1858 to 1959; and 4) 1959 to present. Initially, mandamus proceedings were characterized by a complicated process, as illustrated in Ipes v. Board of Fire Comm’rs of Baltimore. A petition was filed, and the court issued an alternative writ commanding the respondent to act or show cause. The respondent could contest the writ by either moving to quash it or providing a "return," detailing facts to oppose the petition. The relator could not challenge the return's facts and could only pursue a false return action if the return was untrue.
Legislative changes began with the statute of 9 Anne ch. 20 in 1711, which allowed for a return to the initial writ and enabled traversing the return instead of requiring a separate action for a false return. This statute was later expanded in 1831 for other writs of mandamus. In Maryland, the procedural modernization occurred with Chapter 285 of the Acts of 1858, which remained largely unchanged until its repeal in 1962, aligning with the adoption of Special Proceedings Rules. Under the 1858 statute, a mandamus action commenced with a verified petition, leading to a show cause order. The defendant's answer also had to be verified, and the petitioner could challenge any material claims in the answer, prompting further proceedings akin to an action for a false return.
A factual issue joined by a traverse to the answer in a mandamus action allows either party to request a jury trial. If the petitioner wins a verdict, they recover damages and costs as in a false return case, resulting in an immediate peremptory writ of mandamus against the defendant. The historical context includes the adoption of Special Proceedings Rules on January 1, 1959, with Rule 1240 governing mandamus until January 1, 1962, when it transitioned to Rule BE44, which reflects the provisions of former Article 60. The Rules Committee's Subcommittee on Mandamus, in a report from October 26, 1956, indicated that much of Article 60 was unnecessary as similar results could be achieved through the mandamus rule. Hess argues that the Court of Special Appeals misinterpreted this history; however, the court correctly ruled that Md.Rule BE44 does not allow for attorney's fees as damages or costs in a mandamus action based solely on the unsuccessful party's status. The court also noted uncertainty regarding whether false return actions included counsel fees, but emphasized that Hess's case did not involve allegations of a false return. The court highlighted that an action for a false return was only available to parties who did not prevail due to the falseness of the return and pointed out that Hess had prevailed. Additionally, it was deemed unnecessary to explore recoverable damages in false return actions since references to such actions in former Article 60 were repealed in 1962, and the current Rules do not mention them. Rule BE44 allows a plaintiff to seek both mandamus relief and related damages in one action.
Under Maryland law, the validity of damage claims is determined by substantive law, and under the American Rule, damages do not encompass attorney fees. This principle is firmly established in Maryland, indicating that references to "damages" in legal documents cannot imply exceptions to the American Rule. Hess argues for the inclusion of counsel fees based on equitable principles applied in mandamus actions, referencing several cases, including Konig v. Mayor, City Council of Baltimore. In Konig, the court allowed for attorney fees to be awarded to a party who successfully challenged unauthorized agency actions regarding a competitive bidding project. However, the circuit court's authority to award counsel fees in Hess's case is contested, as merely labeling the action as "equitable" does not exempt it from the American Rule. Notably, Konig involved unique equity powers relating to funds generated through the efforts of counsel, while Hess's situation does not present a comparable context. The case history highlights that in Konig, the court's decisions were influenced by the status of the contract at trial, ultimately upholding the trial court's determination to balance the equities and not grant an injunction against further contract performance. The dissenting opinions in Konig II did not support requiring the contractor to return payments already made for completed work.
The Court instructed the lower Court to determine the portion of the contract price that remains with the City, which the contractor would have been entitled to if not for the proceeding. If sufficient funds are identified, the City must pay the plaintiff's costs, including attorney fees, up to $2,000, and disburse the remaining balance to the contractor. If the City lacks enough retained funds, it must cover the costs and fees not exceeding the specified amounts. The passage clarifies that this is not a blanket authorization for courts to award attorney fees based on equitable principles; rather, it pertains specifically to cases where a taxpayer creates a fund benefiting all taxpayers, as seen in precedents involving common funds. However, Hess’s legal action did not establish such a fund for the taxpayers of Prince George’s County. Hess also referenced cases from other jurisdictions where attorney fees were included as "damages" in mandamus statutes, but these do not apply to the current situation.
Hess's reliance on certain cases reflects a minority perspective regarding the application of the American Rule in mandamus actions. Numerous precedents, including Commodore Mining Co. v. People ex rel. Reynolds and others, indicate that most courts do not classify counsel fees as "damages" under mandamus statutes, supporting the conclusion that Rule BE44 does not authorize such awards. Hess, backed by an amicus brief from the Associated Builders and Contractors of Metropolitan Washington, argues for a reinterpretation of Rule BE44 to permit counsel fees, claiming it would promote fair competitive bidding by discouraging public bodies from rejecting all bids after revealing the lowest bid. However, the court suggests that assessing the implications of this practice involves speculation better suited for legislative inquiry. The court affirmed the decision of the Court of Special Appeals, with costs assigned to the petitioner. Additionally, Hess proposed a collateral litigation theory for counsel fees, which was not relevant to the mandamus request and did not fall under the court's certiorari grant, since Hess was not involved in third-party litigation but rather with the Board. The court noted that Maryland's mandamus does not adopt the English practice of taxing solicitor-client fees as costs. Lastly, the right to a jury trial established in former Article 60, § 7 remains intact.
Maryland legal authorities referencing actions for false returns do not cite any specific case law. Section 258 of F. Ferris's "The Law of Extraordinary Legal Remedies" notes damages for false return but lacks details on recoverable damages or counsel fees. W. Blackstone's "Commentaries" mentions an action for false return without case citations. T. Tapping's work discusses civil actions for false return, omitting counsel fees and case law for collateral civil actions awarding damages. The case of Booze v. Humbird illustrates a mandamus claim; Booze sought the mayoral office but lost in court and died during appeal. His representative attempted to continue the case, but the court ruled the claim abated upon his death, akin to personal injury claims, thus not an asset of the estate. In Inlet Assocs. v. Assateague House, plaintiffs set aside a municipal transfer and sought counsel fees, but the trial court denied them, ruling the plaintiffs acted in their interest. The appellate court upheld this discretion without addressing whether the transferred property constituted a "fund." Hess's reference to State ex rel. Pac. Bridge Co. v. Washington Toll Bridge Authority indicates that counsel fees awarded there were statutory, not based on the mandamus statute's definition of "damages," with fees categorized as taxable costs in Washington state.
