100 Investment Ltd. Partnership v. Columbia Town Center Title Co.

GREENE, J. This case has its roots in a real estate transaction that occurred over twenty-five years ago. In 1982, two elderly widows (“the Millers”) sold a tract of land in Howard County to one party, and then, four years later, purported to sell the same tract of land to Petitioner (100 Investment Limited Partnership, or, “the Partnership”). The Partnership engaged two title companies, Cambridge Title Company (“Cambridge”) and Columbia Town Center Title Company (“Columbia”) (collectively, “the Title Companies,” or “Respondent”) to complete the title work. The Title Companies, however, failed to locate and report the Millers’ first land sale.

Chicago Title Insurance Company (“Chicago Title,” or “Respondent”) underwrote the insurance policies on the tract of land at issue. These transactions have spawned a complex line of facts and numerous lawsuits that will be detailed infra. ²⁰³ We are asked to determine whether a title company owes a duty of care, in tort, when conducting a title search. As an extension of this question, we are also asked whether a title insurance company may be held vicariously liable as a result of the Title Companies’ negligent title search. In this case, we do not re-view a title company’s or a title insurance company’s contractual obligations.

We shall hold that the Title Companies owed a duty of care to their customer, the Partnership, in conducting the title search and issuing the title commitment. Additionally, we conclude that, under the circumstances, Chicago Title may not be held vicariously liable for the Title Companies’ negligence. I. On August 24, 1982, Francis L. Miller and Mildred C. Miller (“the Millers”) conveyed a 1.144-acre tract of land in Howard County to Ahsan S. Khan, as Trustee for Ahsan S. Khan, M.D., P.A., Profit Sharing Plan (“Dr. Khan”). The deed was properly recorded among the land records for Howard County.

On October 14, 1986, however, the Millers purported to sell the same 1.144-acres of land (“the disputed tract”) to the Partnership. The sale included the disputed tract as part of a larger sale of a 49.845-acre tract of land. Cambridge Title Company 1 “was engaged to do the title work” 2 for this transaction. The Partnership also hired Dewberry & Davis, ²⁰⁴ LLC (“Dewberry”) to survey the land for the potential sale.

There does not appear to be any genuine dispute that Cambridge issued a title commitment 3 and later an insurance policy 4 to the Partnership underwritten by Chicago Title, 5 pursuant to an agency agreement between Cambridge and Chicago Title. 6 The commitment did not report the previous sale to Dr. Khan. Cambridge has since gone out of business. ²⁰⁵ On December 18, 1986, there was a transfer of ownership interests in the Partnership. The original owners transferred their ownership interest in the Partnership to Petitioners Coscan/Adler Limited Partnership (formerly “Costain/Adler Limited Partnership”) and Brit-Am II Limited Partnership. Columbia “was engaged to do the title work” for the December transaction.

Columbia issued a title commitment to the Partnership and later issued an insurance policy underwritten by Safeco Title Insurance Corporation (“Safeco”). Columbia failed to report the earlier sale to Dr. Khan in the commitment or the policy. After that transaction, Chicago Title acquired Safeco. As such, Chicago Title assumed Safeco’s liabilities and is, therefore, responsible for Safeco title insurance policies.

In 1994, for the purpose of residential development, the Partnership subdivided the land it had purchased from the Millers, including the disputed tract. The Partnership subsequently executed and recorded a Declaration of Covenants, Easements, Charges, and Liens in connection with the residential development in Howard County. The Partnership purportedly dedicated a portion of the disputed tract as a public utility easement. Thereafter, the Partnership purportedly conveyed to N.V.R. Homes, Inc. (“NVR”) a portion of the disputed tract as part of five townhouse lots.

These lots were later improved and conveyed to individual homeowners. On August 30, 1995, the Partnership purportedly conveyed the remainder of the disputed tract, as part of a larger conveyance to The Lyndwood ²⁰⁶ Association, Inc., a homeowner’s association, to be used for common area open space and landscaping. It was not until July 26, 2001, that the Partnership learned of the previous sale of the disputed tract from the Millers to Dr. Khan. The Partnership only discovered this information after Dr. Khan agreed to sell a large tract of land, including the disputed tract to 100-103 Center, LLC, and Courtyards at Timbers, LLC, (collectively, “Timbers”) and Timbers hired a surveyor.

The surveyor discovered townhouses located on a portion of the land that Timbers intended to purchase from Dr. Khan. Timbers contacted the Partnership and notified it of the impending sale, scheduled to take place within the week. To cure the title defect, the Partnership offered to repurchase the disputed tract from Timbers after Timbers purchased the land from Dr. Khan. Thereafter, the Partnership repurchased the disputed tract from Timbers at the fair market value that Timbers had paid per acre to Dr. Khan, amounting to $175,348.56.

The Partnership incurred additional expenses with regard to the transaction, including costs and attorneys fees bringing the total cost to $191,510.88. On April 7, 2004, the Partnership filed a complaint in the Circuit Court for Howard County against Cambridge, Columbia, Chicago Title, Dewberry, and Francis L. Miller, the surviving grantor of the disputed tract. 7 The Partnership ²⁰⁷ alleged claims for negligence against (1) Cambridge and Columbia in performing the title search and failing to discover and report the Khan deed, (2) Dewberry for its negligent performance of the land survey, and (3) Chicago Title under a theory of vicarious liability for the Title Companies’ negligent title search. 8 The Title Companies and Chicago Title responded to the complaint and filed a motion for summary judgment. They alleged collateral estoppel, claiming that the action was barred because the factual issues had been resolved in the Fourth Circuit, and that the Partnership could not prove that its damages were proximately caused by the Title Companies’ ²⁰⁸ negligent title search. The trial court granted summary judgment in favor of the Title Companies and Chicago Title, 9 concluding that collateral estoppel barred the action and that the Partnership could not show that its damages were proximately caused by the Title Companies’ search.

The Partnership appealed to the Court of Special Appeals. The intermediate appellate court, in an unreported opinion, reversed the trial court’s determinations and remanded the case to the trial court to determine factually whether any negligence by the Title Companies was the proximate cause of the Partnership’s damages. The intermediate appellate court held that the action was not barred by collateral estoppel because the federal litigation sounded in contract and dealt with the title policy and the extent of its coverage, whereas the present complaint sounded in tort. After remand, a bench trial was held in the Circuit Court for Howard County, and on May 11, 2009, the court issued a memorandum opinion, ruling in favor of the Partnership.

The court determined that the Title Companies were engaged “to perform all the duties expected of a title company in connection with the purchase of land in a commercial real estate transaction.” This undertaking required that the title examiner use “a reasonable degree of skill and diligence [in examining title].” Corcoran v. Abstract & Title Co. of Md., Inc., 217 Md. 633, 637 , 143 A.2d 808, 810 (1958). Based on the evidence adduced at trial, the court found that the Title Companies breached this duty. Furthermore, the court maintained that the Title Companies “would have known” that the Partnership would rely on their title search. According to the trial judge, the negligent title search was a proximate cause of the Partnership’s losses.

As such, the court determined that the Title ²⁰⁹ Companies were liable in tort to the Partnership. Additionally, the court held that Chicago Title was vicariously liable for the Title Companies’ negligence under the doctrine of respondeat superior because Chicago Title “exerted a lot of control over its local agents,” as gleaned from the parties’ contracts and testimony in the trial court proceedings. The trial court awarded the Partnership $191,510.88. The Title Companies and Chicago Title appealed to the Court of Special Appeals.

The intermediate appellate court held that the Title Companies owed no duty in tort to the Partnership on the basis of the title search. Columbia Town Ctr. Title Co. v. 100 Inv. Ltd. P’ship, 203 Md.App. 61, 82 , 36 A.3d 985, 997 (2012).

In reaching this result, the court emphasized that the General Assembly has neither imposed nor given any indication of an intent to impose a tort duty on title companies. Columbia Town Ctr. Title Co., 203 Md.App. at 83-86 , 36 A.3d at 998-1000 . The court also distinguished the role of a title searcher from other professionals, such as attorneys, who have been found to owe a duty in tort, concluding that title searchers’ licensing requirements do not focus on “ensuring proficiency in the search and examination of title,” and that their work does not require professional judgment to the same extent as attorneys and other professionals.

Id. Furthermore, the court held that Chicago Title could not be vicariously liable in tort for the Title Companies’ negligence given the insurance company’s role as an indemnifier, not a guarantor, of title. Columbia Town Ctr. Title Co., 203 Md. App. at 91, 103 , 36 A.3d at 1002-03, 1009-10 .

The court explained that if a title insurance company could be liable in tort, it would be deprived of its option to cure or pay for covered losses as specified in the insurance policy. Columbia Town Ctr. Title Co., 203 Md.App. at 91 , 36 A.3d at 1002 . The court noted that the scope of Chicago Title’s agency relationship with the Title Companies did not extend to undertaking a title search for the benefit of the insured.

Columbia Town Ctr. Title Co., 203 Md.App. at 98-99 , 36 A.3d at 1006-07 . In addition, the court reasoned that the insurance policy between Chicago Title and the Partnership contained a limited liability ²¹⁰ provision that restricted any action against the insurance company in negligence to the insurance contract. Columbia Town Ctr.

Title Co., 203 Md.App. at 102 , 36 A.3d at 1009 . In a dissenting opinion authored by Judge Meredith, he concluded that the Title Companies owed a duty in tort to the Partnership. Columbia Town Ctr. Title Co., 203 Md.App. at 104 , 36 A.3d at 1010 (Meredith, J., dissenting).

Judge Meredith explained that “[w]hen a contract purchaser of real property engages a title company to conduct settlement on the contract ... the typical purchaser of real estate expects, at a minimum, that the title company will (1) confirm that the seller holds good and marketable title, and (2) prepare a deed that transfers good and marketable title to the purchaser.” Id. The purchaser relies on this information to decide whether to go to closing. Id. According to the dissent, Maryland law provides that a claim against a title company may be asserted in negligence.

Columbia Town Ctr. Title Co., 203 Md.App. at 105 , 36 A.3d at 1010 . To support this conclusion, Judge Meredith compared the role of the title searcher to that of professionals who have been found to owe a duty in tort. Columbia Town Ctr.

Title Co., 203 Md.App. at 105-07 , 36 A.3d at 1010-12 . Subsequently, the Partnership asked that we review the case. We granted certiorari in 100 Inv. Ltd. P’ship v. Columbia Town Ctr.

Title Co., 426 Md. 427 , 44 A.3d 421 (2012), to answer the following questions: 1. Did the Court of Special Appeals err by holding that the principles of Jacques v. First National Bank of Maryland, 307 Md. 527 , 515 A.2d 756 (1986) did not apply to title companies in general and therefore that the Title Companies did not owe a tort duty of care to the Partnership in conducting a title search for the benefit of the Partnership? 2. Did the Court of Special Appeals err by holding that Chicago Title was not vicariously liable for the negligence of the Title Companies, who were its agents? ²¹¹ II. The issue before us is whether there was a duty imposed on the Title Companies in tort.

We are asked first to discern, therefore, whether a title company may owe a tort duty of care for a title search, and whether the Title Companies in the present case owed a duty of reasonable care to the Partnership in conducting a title search. Whether a legal duty exists between parties is a question of law to be decided by the court. See Pace v. State, 425 Md. 145, 154 , 38 A.3d 418, 423 (2012) (citing Valentine v. On Target, Inc., 353 Md. 544, 549 , 727 A.2d 947, 949 (1999)). We review the trial court’s legal determinations for legal correctness.

See Walter v. Gunter, 367 Md. 386, 392 , 788 A.2d 609, 612 (2002) (citations omitted) (“[O]ur Court must determine whether the lower court’s conclusions are ‘legally correct’ .... ”). The Partnership contends that the Title Companies owed a duty to exercise reasonable care in searching the title to the property conveyed by the Millers to the Partnership. Further, the Partnership maintains that under Jacques v. First Nat’l Bank of Md., 307 Md. 527 , 515 A.2d 756, 760 (1986) and its progeny, a tort duty of care arises independently as a matter of public policy, and in economic loss cases, a duty is imposed when there is an “intimate nexus” between the parties. In other words, according to the Partnership, because it engaged the Title Companies to conduct a title search, which “went to the core of the[ir] relationship,” and it was foreseeable to the Title Companies that the Partnership would rely on the accuracy of the title search to close on the land contract, the relationship was such that the parties shared an “intimate nexus.” The Partnership also highlights the importance of the information supplied by title companies to their customers, comparing the title examiner’s work to that of doctors, lawyers, accountants, architects, and other professionals that have been found to owe a duty in tort.

In response, the Title Companies contend that the relationship between the Title Companies and the Partnership was ²¹² contractual in nature, and, as such, a tort duty should not be imposed. Furthermore, according to the Title Companies, the relationship between the parties was limited in nature; the Partnership contracted with the Title Companies to issue title binders and title insurance policies, not to provide title opinions. This limited relationship, the Title Companies maintain, cannot be construed as an “intimate nexus” to warrant tort liability, as there was no expectation or reliance on behalf of the Partnership on the information contained in the title commitments or policies. The Title Companies also argue that public policy does not warrant a tort duty of care.

For example, the legislature has yet to establish liability, in tort, for title companies. Additionally, the Title Companies contrast their duties with those of industry professionals where this Court has established an additional tort duty of care. See Jacques, 307 Md. at 541 , 515 A.2d at 763 (citations omitted) (noting that the “law generally recognizes a tort duty of care arising from contractual dealings with professionals such as physicians, attorneys, architects, and public accountants ... [and] we have recognized that in those occupations requiring peculiar skill, a tort duty to act with reasonable care will be imposed on those who hold themselves out as possessing the requisite skill”). “It is a settled and ‘familiar proposition that not every duty assumed by contract will sustain an action sounding in tort.’ ” Mesmer v. Md. Auto. Ins.

Fund, 353 Md. 241, 252 , 725 A.2d 1053, 1058 (1999) (citing Council of Co-Owners Atlantis Condo., Inc. v. Whiting-Turner Contracting Co., 308 Md. 18, 32 , 517 A.2d 336, 343 (1986)); see also U.S. Gypsum Co. v. Mayor of Balt., 336 Md. 145, 156 , 647 A.2d 405, 410 (1994); Decoster v. Westinghouse Elec. Corp., 333 Md. 245, 250-51 , 634 A.2d 1330, 1332-33 (1994) (citations omitted); Jacques, 307 Md. at 534 , 515 A.2d at 759 . There are situations, however, when responsibilities imposed by a contractual relationship are supplemented with tort duties. See Jacques, 307 Md. at 534 , 515 A.2d at 759 (citing Slacum v. Trust Co., 163 Md. 350, 352-53 , 163 A. 119, 120 (1932)).

Our law is well-established that to assert a claim in negligence, the plaintiff ²¹³ must prove: “(1) that the defendant was under a duty to protect the plaintiff from injury, (2) that the defendant breached that duty, (3) that the plaintiff suffered actual injury or loss, and (4) that the loss or injury proximately resulted from the defendant’s breach of the duty.” Lloyd v. Gen. Motors Corp., 397 Md. 108, 131-32 , 916 A.2d 257, 270-71 (2007) (emphasis added) (quoting Valentine, 353 Md. at 549 , 727 A.2d at 949 ). We have adopted Prosser and Keeton’s characterization of “duty” as “an obligation, to which the law will give recognition and effect, to conform to a particular standard of conduct toward one another.” See Blondell v. Littlepage, 413 Md. 96, 120 , 991 A.2d 80, 94 (2010) (quoting W. Page Keeton, et al., Prosser and Keeton on The Law of Torts § 53 (5th ed.1984)). Thus, in determining whether “an actionable duty exists represents a policy question of whether the specific plaintiff is entitled to protection from the acts of the defendant.” Blondell, 413 Md. at 120 , 991 A.2d at 94 ; see also Pendleton v. State, 398 Md. 447, 461 , 921 A.2d 196, 204-05 (2007) (citations omitted).

In Maryland, to impose a tort duty on title examiners is not a novel idea. We have recognized that “[o]ne who undertakes to examine a title for compensation is bound to exercise a reasonable degree of skill and diligence in the conduct of the transaction.” Corcoran v. Abstract & Title Co. of Md, Inc., 217 Md. 633, 637 , 143 A.2d 808, 810 (1958). We explained that although liability for a faulty title search in reality rests upon the contractual relationship between the title searcher and the customer, it is also “ordinarily enforced by an action ... for negligence in the discharge of [the title examiner’s] professional duties.... ” Corcoran, 217 Md. at 637 , 143 A.2d at 810 (citing Watson v. Calvert Bldg. Ass’n, 91 Md. 25, 33 , 45 A. 879, 881 (1900)); accord Stone v. Chicago Title Ins.

Co., 330 Md. 329, 335-36 , 624 A.2d 496, 499-500 (1993). To determine whether a tort duty exists in a particular context, we examine: (1) “the nature of the harm likely to result from a failure to exercise due care,” and (2) “the ²¹⁴ relationship that exists between the parties.” Jacques, 307 Md. at 534 , 515 A.2d at 759 . As we explained further in Jacques : Where the failure to exercise due care creates a risk of economic loss only, courts have generally required an intimate nexus between the parties as a condition to the imposition of tort liability. This intimate nexus is satisfied by contractual privity or its equivalent.

By contrast, where the risk created is one of personal injury, no such direct relationship need be shown, and the principal determinant of duty becomes foreseeability. Jacques, 307 Md. at 534-35 , 515 A.2d at 759-60 (citations omitted). We have, on numerous occasions, considered when an “intimate nexus” is present between parties such that a duty in tort exists in a case of economic injury. See Blondell, 413 Md. at 122 , 991 A.2d at 95 (discussing whether an intimate nexus existed between two attorneys to support the existence of a duty to warrant economic damages); Chicago Title Ins.

Co. v. Allfirst Bank, 394 Md. 270, 296 , 905 A.2d 366, 381 (2006) (analyzing whether an intimate nexus existed between a bank and a non-customer drawer of a check in a tort action where only economic loss resulted); Jacques, 307 Md. at 534-35 , 515 A.2d at 759-60 (1986) (assessing whether an intimate nexus existed between a bank and its customer). In Jacques , we were asked to determine whether a bank that undertook to process and make a determination on a loan application owed its customer a duty of care in the processing of the application. Jacques, 307 Md. at 528 , 515 A.2d at 756 . We highlighted two cases from the Court of Appeals of New York to delineate the line between relationships that do and do not warrant tort liability when damages are economic.

The first case cited was Glanzer v. Shepard, 233 N.Y. 236 , 135 N.E. 275 (1922), a case where the plaintiff, a bean consumer, sued a defendant bean weigher for negligent bean weighing. The contractual relationship, however, was between the bean weigher and a third party seller of beans. Judge Cardozo, ²¹⁵ writing for the Court, held that as the buyer was the known and intended beneficiary of the agreement, the weigher was on notice that the buyer would rely on the information the weigher provided, namely, the bean weight, in completing his purchase. Furthermore, because the reliance on the information supplied by the bean weigher was the end aim of the transaction (and the inducement to purchase), there was a close enough relationship between parties to hold the bean weigher liable in tort to the buyer.

Glanzer, 135 N.E. at 275-77 . We contrasted Glanzer with Ultramares Corp. v. Touche, 255 N.Y. 170 , 174 N.E. 441 (1931), where the Court of Appeals of New York refused to find liability in tort because the relationship between a negligent accountant and a third party relying on the balance sheet prepared by the accountant for a corporation was too attenuated. The Ultramares court stressed that because the third party was part of an “indeterminate class of persons,” there was no privity or close enough relationship to hold the accountant liable for negligence to the third party. Ultramares, 174 N.E. at 445-47 .

The Jacques Court then applied a similar relationship analysis to its facts. The Court noted that when the bank agreed to process and make a determination on the loan application, the Bank knew that the customer was “particularly vulnerable and dependent upon the Bank’s exercise of due caret,]” as the bank was aware that the customer would be obligated to forfeit its housing deposit or proceed to settlement with the loan in light of the bank’s determination. Jacques, 307 Md. at 540-41 , 515 A.2d at 762-63 . Therefore, the bank had a duty to process the application with reasonable care given the bank’s relationship with its customer and the bank’s knowledge of the customer’s reliance on the bank’s services.

The Jacques Court also considered an additional factor relevant to the determination of whether to recognize a tort duty: the “nature of the business of the party upon whom the burden is sought to be imposed.” Jacques, 307 Md. at 541 , 515 A.2d at 763 . We explained: ²¹⁶ The law generally recognizes a tort duty of care arising from contractual dealings with professionals such as physicians, attorneys, architects, and public accountants. Additionally, we have recognized that in those occupations requiring peculiar skill, a tort duty to act with reasonable care will be imposed on those who hold themselves out as possessing the requisite skill. Jacques, 307 Md. at 541 , 515 A.2d at 763 (citations omitted).

As banks have traditionally “been held to a high degree of integrity and responsiveness to their public calling[,]” we held that the plaintiff must show that the defendant “failed to exercise that degree of care which a reasonably prudent bank would have exercised under the same or similar circumstances.” Jacques, 307 Md. at 541-44 , 515 A.2d at 763-64 . 10 We were again asked whether privity or its equivalent existed between parties to warrant tort liability in Walpert, Smullian & Blumenthal, P.A. v. Katz, 361 Md. 645 , 762 A.2d 582 (2000). In Walpert, an accounting firm contracted with a business to prepare a financial report. The firm prepared the report in a negligent manner and a third party relied on the report, suffering economic damages. The Court discussed the variety of approaches to finding duty or lack thereof.

Walpert, 361 Md. at 657-92 , 762 A.2d at 588-607 . In applying the privity standard enunciated in Jacques and Ultramares, the Court looked for an intimate nexus between the parties. 11 ²¹⁷ Focusing on the accountant’s knowledge of the third party’s reliance on the accountant’s report, we concluded that the accountant’s knowledge could suffice as the legal equivalent of privity necessary to establish a negligence claim between the parties. 12 Walpert, 361 Md. at 684-88, 692-94 , 762 A.2d at 603-05, 607-09 . The Court of Special Appeals has also analyzed when an “intimate nexus” might exist between parties. See Champion Billiards Cafe, Inc. v. Hall, 112 Md.App. 560, 569-71 , 685 A.2d 901, 906 (1996) (noting the existence of an “intimate nexus” between employer and employee, and that the service offered by employer to forward an insurance application and withhold premiums was “a type of service ordinarily provided to an employee by an employer,” that the employer undertook the task knowing that the employee relied on the employer to do so, and that the “failure to forward the application would result in a lack of coverage”) 13 ; Chew v. Meyer, 72 Md.App. ²¹⁸ 132, 141-42 , 527 A.2d 828, 832-33 (1987) (highlighting the “intimate nexus” between a doctor and his patient to support a tort claim for negligent handling of an insurance form based on the parties’ contractual relationship, the patient’s reliance, the risk of harm, and the doctor’s knowledge of both the reliance and the risk).

We explained in Walpert that “the rationale underlying the requirement of privity or its equivalent as a condition of liability for negligent conduct ... resulting in economic damages ... [is] to avoid ‘liability in an indeterminate amount for an indeterminate time to an indeterminate class.’” Walpert, 361 Md. at 671 , 762 A.2d at 596 (quoting Ultramares, 174 N.E. at 444 ). A defendant can protect itself from such unpredictable and unlimited liability in cases where there is a close nexus between the parties. Such a relationship might stem from a defendant’s knowledge of the plaintiffs identity, the class in which a plaintiff belongs, and the defendant’s knowledge that the prospective plaintiff may be relying on the information provided by a defendant. Walpert, 361 Md. at 671, 687 , 762 A.2d at 596 , 605 (citing Glanzer, 135 N.E. at 275-76 ).

This rationale helps explain why we did not find tort liability in Blondell v. Littlepage, 413 Md. at 101 , 991 A.2d at 83 . In Blondell , we considered whether an attorney, William Blondell, could sue another attorney, Diane Littlepage, for negligent consultation, communication, and disclosure, even though there was a shared fee agreement between the parties governing the duties owed one another. We held that any duty owed by Littlepage to Blondell was “circumscribed by the fee sharing agreement,” which “directly contradicted] the existence of th[e] duties.” Blondell, 413 Md. at 122-23 , 991 A.2d at 96 . Through the fee sharing agreement, Blondell “had conceded at the inception any necessity of consultation and its ²¹⁹ attendant communication between him and Littlepage.” Id.

This, therefore, is a situation where the defendant excluded itself from liability such that the plaintiff was on notice not to rely on the defendant. The expectation by the parties involved, therefore, was essentially that no duty was owed. This case differs from the others where privity and an “intimate nexus” was found as a result of the expectation and knowledge of reliance by the plaintiff. In the instant case, we concern ourselves with whether there existed an “intimate nexus” between the Partnership and the Title Companies to warrant a duty to exercise due care in conducting the title search.

We examine the relationship between the parties, to see if there is contractual privity or its equivalent. Although the parties disagree as to the nature and scope of their relationship, the Title Companies and the Partnership agree that the Title Companies were engaged to do the “title work” for the two land sales. Part of the title work included the issuance of the title binders by the title company on behalf of the insurance company to the prospective buyer before closing. These title binders were issued as part of the title commitment.

According to Michael Schleupner, who testified during a deposition as Chicago Title’s corporate designee, a title commitment is issued by the title agent, and is also known as a binder ... used in the personalized insurance business ... issued prior to the closing and it says if a closing takes place, if money is to be lent by a lender, if the consideration of the purchase of a property is to be offered to the right parties[,] [the insurance company] stand[s] ready, willing and able to ensure the title under the following circumstances and it’s divided into three parts. There’s Schedule A, Schedule B-l, and Schedule B-2. Schedule A says who the potential insured will be and identifies who is currently in title. It lists the amount of the policy to be issued.

It describes the property to be insured. ²²⁰ Schedule B-l [lists] requirements ... if there are existing liens on the property the requirements would be they have to be paid. If there are taxes on the property that are open taxes they have to be paid. It also identifies the instruments that have to be recorded for the company to insure the title as set forth in Schedule A---- Schedule B-2 contains those exceptions to title both preprinted ... generally survey matters and things and also those discovered in the course of examining the title or the land records, you know, pole line agreements, easements, restrictions, covenants and things of that sort, matters set forth on recorded subdivision plats. Basically the company is committing itself to ensure ... this title for this amount of money if you pay us a premium of[ ] X but our policy will contain exceptions to coverage A, B, C, D, E, F, G. The significance of the information contained in the title commitment was described by Petitioner’s expert witness John Llewellyn during trial.

He explained that after the title search is completed, the commitment is prepared. Thereafter, the title commitment is basically the — is the title report that’s the face to the clients involved, to — [ ] the purchaser of the property, would get a copy of the title commitment to review.... [N]either the purchasers of the property or the sellers or the — any lenders involved are going to see the raw title abstract. The only thing they’re going to see — the only thing they’re going to know is what’s on the title commitment that ... what the status of the title is. [T]he purchaser would examine the title commitment to see ... there’s many things .... who is the owner of the property ... the legal description of the property ... a metes and bounds description [of the property.] ... the things that would have to be done in order for a closing to even take place.... There would also be in there what things have to be in order — in order to have marketable title transfer ... routine things ... like releases or mortgages or deeds of trust ²²¹ ... that affect the property ... [and][t]he exceptions ... that affect the property presently.

Furthermore, Mr. Llewellyn stated that “the most important aspect of what a title settlement company does is to make sure that good title is passing, fee simple in this case, marketable, insurable title is passing to the buyer. That’s their main function in handling the closing, and the most important function.” Gregory Reed, the Partnership’s attorney in the December transaction also testified during a deposition as to the significance of the title binder to the purchaser. He explained that the title binder is “extremely important ... you’re buying not dirt and bricks you’re buying a bundle of legal rights and the title binder is what gives you a snapshot of what those rights are supposed to be ... [t]hat you have free title and that the title is not encumbered in a way that’s not satisfactory to you.” In the present case, the record contains a copy of the Title Commitment issued to the Partnership by Cambridge on behalf of Chicago Title for the October transaction, and the Title Commitment issued by Columbia on behalf of Safeco for the December transaction. For the October transaction, Schedule A states that “[t]he estate or interest in the land described or referred to in this Commitment and covered herein is [in] fee simple, and title thereto is at the effective date hereof vested in: [the Millers], as tenants in common.” Schedule B lists the title requirements and exceptions, and includes specific right of way easements and agreements, from a title search.

The detailed description of the land is also included as shown according to the survey conducted by Dewberry. The Commitment did not disclose the basic fact that the Millers had already sold some of the land to another party, and could not sell the same land to the Partnership. The record also contains a deed written by Cambridge, by which the Millers purportedly conveyed to the Partnership the disputed tract of land as part of a larger sale, even though the Millers did not own the disputed tract at that time. Similarly, the December commitment lists the Partnership as owner of the land in fee simple, describes, in detail, the ²²² exceptions in Schedule B-l, and includes the title requirements and a description of the land. 14 The December commitment incorrectly lists the Partnership as the owner of the entirety of the parcel, when, in actuality, the Partnership never owned the disputed tract and thus never had ownership rights to sell that land.

In the situation where there is only an economic injury, as in the present case, we note that to impose tort liability under the standard discussed in Walpert, the Partnership would have to establish: “(1) [that] the [Title Companies] must have been aware that the [title search information] w[as] to be used for a particular purpose or purposes; (2) in the furtherance of which a known party or parties was intended to rely; and (3) there must have been some conduct on the part of the [Title Companies] linking [them] to that party or parties, which evinces the [Title Companies’] understanding of that party or parties’ reliance.” See Walpert, 361 Md. at 674, 690, 692-94 , 762 A.2d at 597-98, 606 , 607-09 (citing Credit Alliance Corp. v. Arthur Andersen & Co., 65 N.Y.2d 536 , 493 N.Y.S.2d 435 , 483 N.E.2d 110 , 118 (1985)). “Nothing in [this] test ... prescribes that the conduct exceed a minimum level ... [n]or [is there] ... a requirement that the [Title Companies] either directly convey[ed] the [title report] to the [] party or otherwise act[ed] in some manner specifically calculated to induce reliance on the [title report].” Walpert, 361 Md. at 692 , 762 A.2d at 608 (citations and quotations omitted). Based on the record and the evidence adduced at trial, the record supports the conclusion that there was a sufficient intimate nexus between the Title Companies and the Partnership to establish a duty owed by the Title Companies to the Partnership. As such, the trier of fact was not clearly erroneous in making this conclusion. 15 When the Title Companies were engaged to issue title ²²³ commitments to the Partnership, the Partnership expected the Title Companies to conduct a title search exercising reasonable care and skill, and to record the results of such a search in the commitments issued to the Partnership. Furthermore, the Partnership looked to the title commitments and the information detailed by them to discern that the seller had good and marketable title to the land.

The Partnership would have then relied on the information obtained by the Title Companies in its title search and as stated in the title commitment to help decide whether it would purchase the land. The intimate nexus in the present case stems from the relationship between the Title Companies and the Partnership. First, contractual privity is easily established as both parties agree that the Partnership engaged the Title Companies to perform “title work” with regard to the land that included the disputed tract. The Title Companies also undertook to issue title insurance commitments and title insurance policies underwritten by Chicago Title for the Partnership.

Although a full recitation of the details of the contract are not known, from the information contained in the title commitment it is evident that the Title Companies took it upon themselves to perform a title search, and identify that search in the title commitments issued to the Partnership. These commitments contained detailed information applicable to the sale of the land and offered in furtherance of the sale of the land. There was sufficient evidence that the title commitments induced the Partnership, or, at the very least, facilitated the Partnership’s closing of the land transaction. As the title information contained in the title commitment was what the purchaser ²²⁴ used to assess the status of the title, the Title Companies knew that the Partnership would rely on this information to make the purchasing decision.

See Walpert, 361 Md. at 684 , 762 A.2d at 603 (discussing Glanzer , which “recognize[d] that a defendant’s knowledge of a third party’s reliance on the defendant’s action may be important in the determination of whether that defendant owes that party a duty of care”). In the instant case, the Title Companies knew that the Partnership would rely on the title commitment. The commitment, prepared by the Title Companies, specifically detailed the kind of information found in a title search, including a description of the owners, what the owners’ interests in the property were, and defects in title. Such information is relied upon in making decisions as to whether to proceed to closing.

In Glanzer , the Court of Appeals of New York explained that the “plaintiffs’ use of the [weight] certificates was not an indirect or collateral consequence of the action of the weighers. It was a consequence which, to the weighers’ knowledge, was the end and aim of the transaction.” Glanzer, 135 N.E. at 275-76 . Similarly here, the Partnership’s reliance on the information in the commitment, supplied by the Title Companies to use in considering whether to proceed to closing, was not an indirect consequence of the Title Companies’ issuance of a commitment; it was an aim of the title insurance transaction. By supplying information normally adduced in a title search and placing that information in a preliminary title report before closing, the Title Companies were on notice that the Partnership would use that information to assess the ownership rights it would acquire.

As we stated in Chicago Title Ins. Co. v. Allfirst Bank, “[u]nlike the facts of Ultramares, our holding does not impose liability on [the defendant] to an indeterminate class of people for an indeterminate time, but rather, addresses a specific entity.... ” Chicago Title Ins. Co., 394 Md. at 299-300 , 905 A.2d at 383 . Here, it was the Partnership that engaged both Title Companies to do title work to facilitate the purchase of a specific tract of land.

The Title Companies procured the search and supplied this information in the title commitment ²²⁵ for the benefit of the Partnership on behalf of the insurance provider for the purposes of the future sale of land. Given the relationship of the parties in the present case, the significance of the title search, the details outlined in the preliminary title commitment report, and the fact that an insured looks to the title