Exxon Mobil Corp. v. Albright

CourtCourt of Special Appeals of Maryland
PartiesEXXON MOBIL CORPORATION v. THOMAS M. ALBRIGHT, et al.
Docket NumberCase # 03-C-07-003809,No. 15,15
Decision Date26 February 2013

EXXON MOBIL CORPORATION
v.
THOMAS M. ALBRIGHT, et al.

Case # 03-C-07-003809
No. 15

COURT OF APPEALS OF MARYLAND

September Term, 2012
Filed: February 26, 2013


Exxon Mobil Corporation v. Albright, et al., No. 15, September Term 2012.

TORTS - FRAUD - DETRIMENTAL RELIANCE REQUIRED

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. Maryland law does not permit a third party to recover damages for fraud purely on the basis of a false statement made to a governmental entity. Thus, where a plaintiff does not prove reliance on a personal basis or does not establish detriment arising from his or her reliance, he or she may not recover damages for fraud.

TORTS - DAMAGES - EMOTIONAL DISTRESS FOR FEAR OF DEVELOPING DISEASE

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.

TORTS - DAMAGES - MEDICAL MONITORING

A plaintiff may recover damages for medical monitoring costs, usually through the administration of an equitable fund, upon a showing of the following; (1) that the plaintiff was significantly exposed to a proven hazardous substance through the defendant's tortious conduct; (2) that as a proximate result of significant exposure, the plaintiff suffers a significantly increased risk of contracting a latent disease; (3) that increased risk makes periodic diagnostic medical examinations reasonably necessary; and, (4) that monitoring and testing procedures exist which make the early detection and treatment of the disease possible and beneficial.

TORTS - DAMAGES - EMOTIONAL DISTRESS FOR FEAR OF INJURY TO REAL PROPERTY

A plaintiff may ordinarily recover emotional distress damages attendant to injury to real property only in the presence of fraud, malice, or like motives.

DAMAGES - INJURY TO REAL PROPERTY - DUPLICATIVE COMPENSATION PROHIBITED

Owners of real property are not precluded necessarily from recovering both permanent diminution in value and loss of use and enjoyment damages, provided that the injuries for which recovery is sought do not overlap, so as to result in duplicative compensation. Where an alleged loss of use and enjoyment is "not distinguishable from" and "subsumed in" a claim for diminution in value, the impaired market value of the real property presumably reflects the injury, and a plaintiff may not recover damages for both loss of use and

Page 2

enjoyment and diminution in value.

TORTS - INJURY TO REAL PROPERTY - NO PHYSICAL IMPACT TO LAND

In the absence of physical injury to real property resulting from a defendant's tortious actions, a plaintiff must demonstrate more than modest adjustments in his or her use of his or her real property in order to recover damages. Thus, a plaintiff who has not provided present proof of contamination must show more than a possibility of future contamination or mere annoyance in order to recover. Absent a substantial interference with a plaintiffs use and enjoyment of his or her land, any diminution in value suffered by a plaintiff is not compensable.

DAMAGES - INJURY TO REAL PROPERTY - LOSS OF USE AND ENJOYMENT

An award for compensatory damages must be anchored to a rational basis on which to ensure that the awards are not merely speculative. In the context of damages for loss of use and enjoyment of real property, we determine that loss of use and enjoyment of real property cannot exceed the fair market, unimpaired value of the property at issue.

EXPERT TESTIMONY - VALUATION OF REAL PROPERTY

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.

Page 3

Circuit Court for Baltimore County

Bell, C.J.
Harrell
Battaglia
Greene
Barbera
McDonald
Eldridge, John C. (Retired,
Specially Assigned),

JJ.

Opinion by Harrell, J.

Page 4

On 17 February 2006, Appellant, Exxon Mobil Corporation ("Exxon"), reported a leak of approximately 26,000 gallons of gasoline from the underground tanks at its fueling station located in Jacksonville, Maryland.1 The seemingly cursed Jacksonville community, the unfortunate site of multiple gasoline leaks over the years, see, e.g., Exxon Corp. v. Yarema, 69 Md. App. 124, 516 A.2d 990 (1987) (noting that in the early 1980s, three gasoline stations located along Jarrettsville Pike in Jacksonville experienced underground gasoline tank leaks), is reliant largely on private wells, rather than municipal supply sources, for its potable water. Thus, following the 2006 release into the underground aquifer serving certain of those wells, 466 residents and business proprietors of Jacksonville (hereinafter referred to collectively as "Appellees") filed the present suit against Exxon for asserted damages stemming from the contamination of their water supply, other consequential effects, and alleged misrepresentations by Exxon. The result was a jury award of $496,210,570 in compensatory damages and $1,045,550,000 in punitive damages for Appellees. Exxon appealed both the compensatory and the punitive damages awards as to all recovering plaintiffs, 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.

FACTS AND PROCEDURAL HISTORY

Exxon purchased the property located at 14258 Jarrettsville Pike in Phoenix,

Page 5

Maryland, in 1981 for the construction of a new gasoline fueling station ("the Jacksonville Exxon"). Exxon was granted initially a construction permit in 1981. It applied for an extension of the life of the construction permit in 1983. Upon its application for extension, however, the Baltimore County Health Department expressed its formal opposition due to pre-existing contamination of the underground water supply stemming from prior leaks in the surrounding area. As a result, the Baltimore County Office of Permits and Licenses denied Exxon's request.

Exxon appealed the denial to the Baltimore County Board of Appeals. At a 24 August 1983 hearing before the Board, an environmental engineering specialist for Exxon, Frederick M. Anderson, testified regarding, among other things, the ongoing remediation efforts for the three prior spills in the community. During his testimony, Anderson described the containment prevention features of the proposed underground fuel storage system at the new station, stating that Exxon was "planning to really take some extraordinary measures" in constructing the underground storage system. Specifically, he asserted that Exxon planned to construct secondary containment measures at the Jacksonville Exxon station, including (1) fiberglass tanks and fiberglass lines; (2) sloped concrete troughs under the product lines running from the dispensers back to the tank field; (3) a polymer-coated polyester lining under the entire tank field; and (4) an observation well that would extend nearly to the bottom of the tank field. In response to concerns regarding potential repeated contamination in the wake of the prior gasoline leaks, Anderson opined that the proposed Jacksonville design ensured that the station would not be a source of contamination. He also conceded,

Page 6

however, that "[a]nything is possible." The Board granted to Exxon the construction permit on 20 October 1983.

During the construction process, Exxon elected to depart from the containment design plans described by Anderson.2 Rather than installing the tank field liner and single-walled tanks, Exxon installed instead newly-available, double-walled, fiberglass Buffhide tanks, fabric-lined product lines, and a plastic overliner. The Jacksonville Exxon station opened for business on or about 1 November 1984. The station was retrofitted with additional protective features in 1992, made in response to enactment of amendments in 1990 to the federal Clean Air Act.3 Evidence was submitted at trial suggesting that, during the retrofitting construction, the plastic overliner containment system was destroyed and was not repaired subsequently. Nevertheless, the Jacksonville Exxon station was operated for its owner by Storto Enterprises, Inc. without a harmful incident for over twenty years.4

On 13 January 2006, an employee from...

To continue reading

Request your trial

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT