Exxon Mobil Corp. v. Albright - 433 Md. 303, 71 A.3d 30 (2013)

Rule:

Although a plaintiff may recover for fraud where the allegedly fraudulent statement was not made directly to the plaintiff, recovery is not permitted without a demonstration that the plaintiff relied, either directly or indirectly, on the relevant misrepresentation to his or her detriment. On the other, in order to recover emotional distress damages for fear of developing disease, a plaintiff must show that 1) he or she was exposed actually to a toxic substance due to the defendant's tortious conduct; 2) which led him or her to fear objectively and reasonably that he or she would contract a disease; and 3) as a result of the objective and reasonable fear, he or she manifested a physical injury capable of objective determination. Also, expert testimony is required ordinarily to establish diminution in property value resulting from environmental contamination. Although Maryland law does not require the use of comparable sales data, to the exclusion of all other methodologies, a real estate appraisal expert must proffer a reasonable justification for ignoring market data where it is available.

Facts:

In February 2006, appellant Exxon Mobil Corporation reported a leak of approximately 26,000 gallons of gasoline from the underground tanks on its fueling station located in Jacksonville, Maryland. The seemingly cursed Jacksonville community, the unfortunate site of multiple gasoline leaks over the years was reliant largely on private wells rather than municipal supply sources for its potable water. Hence, following the 2006 release of gasoline from underground tanks into the underground aquifer serving certain of those wells, appellees Thomas M. Albright et al., who were the local residents and business proprietors of Jacksonville, filed the present suit against appellant for asserted damages which stemmed from the contamination of their water supply, other consequential effects, and alleged misrepresentations by appellant. The jury awarded compensatory and punitive damages to appellees. Appellant appealed both the compensatory and the punitive damages awards as to all recovering plaintiffs-appellees, which were based on claims sounding in fraud, emotional distress for fear of contracting cancer, medical monitoring, emotional distress for fear of loss of property value, diminution in value of real property, and loss of use and enjoyment of real property. Appellant challenged the verdict as to three of those instances on the grounds that the jury relied improperly on a theory of third-party reliance, which the corporation contended was not recognized under Maryland law.

Issue:

Did the trial court err in awarding damages on claims sounding in fraud, emotional distress for fear of contracting cancer, diminution in value of real property?

Answer:

Yes.

Conclusion:

The court held that appellees' theory of third-party reliance failed to satisfy the requirement that they demonstrate personal reliance, thus, because they presented no competent evidence on this missing element, their proof was legally insufficient. Therefore, the trial court's judgment in favor of all appellees on the fraud claims was reversed, as well as the award of punitive damages. The court also held that only one appellee demonstrated an objectively reasonable fear of developing cancer, and the others could not recover emotional distress damages for fear of contracting cancer, since they did not provide evidence of any detectable contamination. Hence, in the absence of demonstrable contamination, they provided no evidence of actual exposure to toxic chemicals stemming from the corporation's conduct. As a result, these appellees could not recover damages for fear of cancer. Further, the admission of a real property valuation expert witness was clear error. The jury award for diminution in value were reversed and remanded for a new trial.