HARRELL, J.
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.
Exxon purchased the property located at 14258 Jarrettsville Pike in Phoenix, 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, however, that "[a]nything is possible." The Board granted to Exxon the construction permit on 20 October 1983.
On 13 January 2006, an employee from Crompco Corporation, an Exxon contractor, drilled unknowingly, while performing maintenance on the "super unleaded grade" containment sump, a hole in the underground fiberglass "regular grade" gasoline feed line leading from one of the gasoline storage tanks to the pumps.
As a result of this confluence of events, the leak continued uninterrupted without activating the alarm system. Andrea Loiero, the station operator, noticed inventory discrepancies following the incident on January 13. Loiero testified that, although she realized in January that she had an inventory problem, she did not know that the daily inventory variances resulted from a leak. On 16 February 2006, Loiero reported the discrepancies in her gasoline inventory to Exxon employee Russ Bowen, at which time the fuel system was shut down and the station closed. A sign posted on the property stated, "Please excuse our appearance, we are working to serve you better. Fueling facilities are temporarily closed for upgrade."
After notifying the MDE of the leak, Exxon held multiple public meetings in the Jacksonville community to inform residents of the situation, beginning with a previously-scheduled meeting of the Greater Jacksonville Neighborhood Association on February 21. The presentations, conducted by both Exxon and MDE officials, included information regarding the projected migration of the gasoline plume within the underground aquifer. Specifically, Exxon and the MDE predicted that, because of the hydrogeology of the area, the contamination would remain concentrated within a half-mile radius along a line running northeast and southwest from the station, which they termed the "strike line."
The MDE is responsible for supervising Exxon's remediation efforts, pursuant to a Consent Decree entered in September 2008.
Additionally, in accordance with the MDE's directives, Exxon provided written updates to residents and government officials regarding the progress of the remediation efforts, including the amount of gasoline recovered. In March and April of 2006, Exxon distributed estimates of how much gasoline had been recovered to Jacksonville residents. After discovering an error in the recovery calculations, Exxon advised residents of the error in April 2006, and submitted corrected estimates to the MDE on 29 June 2006. Exxon and its contractors provided residents with test results from their individual potable wells (where applicable), along with information regarding the drinking water guidelines promulgated by the MDE, and installed POET systems
Appellees filed suit initially in the Circuit Court for Baltimore County on 5 April 2007
At trial, which lasted from 3 January 2011 to 17 June 2011, Appellees maintained that Exxon perpetuated an ongoing fraud designed to deceive both public authorities and members of the community, beginning in 1983 with the construction of the containment system and continuing through the remediation efforts following the discovery of the leak. In support of their allegations, Appellees presented evidence regarding six specific instances of alleged fraud:
Additionally, Appellees sought emotional distress damages for fear of contracting cancer, as well as relief in the form of medical monitoring costs, stemming from their alleged actual or future exposure to gasoline constituents, particularly benzene,
On Appellees' claims for emotional distress for fear of contracting cancer and medical monitoring, the trial court instructed the jury as follows:
In support of their claims for fear of contracting cancer, and over the objection of Exxon's counsel, many Appellees testified regarding their opinions that they, members of their families, or their pets contracted disease as a result of the gasoline leak. At trial, however, no Appellee "assert[ed] a claim for sickness or death of any person or animal." The trial court instructed the jury that no claim could be asserted unless Appellees "offered appropriate expert testimony linking those illnesses or deaths to the level of exposure to gasoline, including any constituent that has caused sickness or death and to any person or animal."
In addition, Appellees sought compensatory damages for diminution in value and past loss of use and enjoyment of real property
At the close of trial, Judge Dugan granted Exxon's Motion for Judgment on Plaintiffs' Claims for Punitive Damages based on allegations of evil motive, ill will, or intent to injure, determining that Appellees' only viable basis for seeking recovery of punitive damages was fraud. Thus, the case went to the jury on causes of action for negligence, strict liability, trespass, nuisance, and fraud.
Exxon filed motions for judgment notwithstanding the verdict and for a new trial and/or remittitur, which were denied on 19 July 2011. On 18 August 2011, Exxon noted timely an appeal to the Court of Special Appeals.
Exxon challenges on multiple grounds the jury's fraud verdicts and resultant punitive damages awards. First, Exxon seeks to undermine the legal sufficiency of the jury's finding of fraud, contending that Appellees did not prove detrimental reliance as to any of the six alleged categories of alleged fraudulent conduct. Second, Exxon argues that the jury verdict sheets were faulty in that they failed to allocate compensatory and punitive damages among the separate categories of alleged fraud, such that an assumed finding of insufficiency by this Court on some, but not all, of the fraud claims mandates nonetheless a new trial. Third, Exxon contends that by failing to require Appellees to define what they meant by "remediation fraud" prior to the commencement of trial, the trial court permitted Appellees to shift their theory of liability during trial in violation of Exxon's due process rights. Lastly, Exxon asseverates that the punitive damages awards are constitutionally excessive. Because we conclude that Appellees' evidence in support of their fraud claims was legally insufficient, we need not decide Exxon's other contentions.
In reviewing a trial court's denial of a motion for judgment notwithstanding a verdict for fraud, we must determine whether "there is any evidence adduced, however slight ... from which reasonable jurors, applying the appropriate standard of proof, could find in favor of the plaintiff on the claims presented." Hoffman v. Stamper, 385 Md. 1, 16, 867 A.2d 276, 285 (2005); see also Darcars v. Borzym, 379 Md. 249, 270, 841 A.2d 828, 840 (2004) (noting that a court "must account for and consider the appropriate burden of persuasion in deciding whether to allow the jury to decide an issue"). We review the trial court's decision to "determine whether it was legally correct, while viewing the evidence and the reasonable inferences to be drawn from it in the light most favorable to the non-moving party." Scapa Dryer Fabrics, Inc. v. Saville, 418 Md. 496, 503, 16 A.3d 159, 163 (2011) (internal citations omitted). We will reverse the denial of a motion for judgment notwithstanding the verdict "only if the facts and circumstances permit but a single inference as relates to the appellate issue presented." Jones v. State, 425 Md. 1, 31, 38 A.3d 333, 350 (2012) (citing Scapa, 418 Md. at 503, 16 A.3d at 163). Thus, because fraud must be proven by clear and convincing evidence, Hoffman, 385 Md. at 16, 867 A.2d at 285 (citing VF Corp. v. Wrexham Aviation, 350 Md. 693, 704, 715 A.2d 188, 193 (1998)), reversal of the trial court's denial of the motion for judgment notwithstanding the verdict is only appropriate when, looking at the evidence in the light most favorable to Appellees, we determine that Appellees did not meet their burden of establishing fraud by clear and convincing evidence.
At trial, Appellees alleged on Exxon's part a continuous course of fraudulent conduct continuing over approximately thirty years, based on six specific instances. Exxon challenges the legal sufficiency of the jury's verdict as to three of those instances — the 1983 construction fraud, 1992 permit fraud, and 2001 double-walled piping fraud — on the grounds that the jury relied improperly on a theory of third party reliance, which Exxon contends is not recognized under Maryland law. We determine that Appellees' theory of third party reliance fails to satisfy the requirement that Appellees demonstrate personal reliance, and thus, because they presented no competent evidence on this missing element, their proof is legally insufficient.
To establish fraud, a plaintiff must prove by clear and convincing evidence that "(1) the defendant made a false representation to the plaintiff, (2) the falsity of the representation was either known to the defendant or the representation was made with reckless indifference to its truth, (3) the misrepresentation was made for the purpose of defrauding the plaintiff, (4) the plaintiff relied on the misrepresentation and had the right to rely on it, and (5) the plaintiff suffered compensable injury as a result of the misrepresentation." Hoffman, 385 Md. at 28, 867 A.2d at 292. Exxon takes issue with the trial court's jury instructions on reliance, which read, in relevant part, that, in order to recover damages for fraud, Plaintiffs need only prove that Exxon "intended the Plaintiffs or Baltimore County or the State of Maryland would act in reliance on [its false] statements" and that "the Plaintiff or Baltimore County or the State of Maryland did justifiably rely on the representations of the Defendant." (Emphasis added).
Ordinarily, a plaintiff seeking recovery for fraud must prove that "the defendant... made a false representation to the person defrauded." Gourdine v. Crews, 405 Md. 722, 759, 955 A.2d 769, 791 (2011) (citations omitted) (emphasis in original). Here, there is no dispute that (1) Exxon did not direct any of these three allegedly fraudulent representations to any of the Appellees; and (2) none of the Appellees relied personally on the three allegedly fraudulent misrepresentations. None of the Appellees contend that they were present at the 1983 meeting of the Baltimore County Board of Appeals at which Anderson testified, knew about the 1992 permit application, or saw, prior to the leak, the 2001 MDE document representing that the Exxon station employed double-walled piping. In the absence of personal reliance, however, Appellees assert an attenuated third-party reliance theory under which they claim that they need not show any evidence of actual, personal reliance in order to establish fraud. Rather, they claim, a cause of action for fraud may be successful under a theory of third-party reliance by demonstrating that Exxon made intentionally or recklessly a false statement to public officials (Baltimore County or the State of Maryland), which the public officials then relied on to the ultimate detriment of the Appellees — rather like fraud on the people's government constitutes fraud on the people. Exxon, by contrast, contends that Maryland law requires that "a plaintiff prove he had knowledge of, and relied upon, a misrepresentation" on a direct and personal basis.
In some circumstances, an individual may recover for fraud even when the allegedly fraudulent statement at issue was not made to him or her directly. See, e.g., Diamond Point Plaza Ltd. P'ship v. Wells Fargo Bank, N.A., 400 Md. 718, 741-42, 929 A.2d 932, 946 (2007) ("Liability [for fraud] is not defeated by the fact that Diamond Point's representations [in a commercial document] were not made directly to Wells Fargo."); Rhee v. Highland Development Corp., 182 Md.App. 516, 539-40, 958 A.2d 385, 389-90 (2008) (permitting a subsequent purchaser of real estate to proceed against the original seller for his or her alleged fraudulent concealment, even though the misrepresentation was not made directly to the subsequent purchaser); Restatement (Second) of Torts § 531 ("One who makes a fraudulent misrepresentation is subject to liability to the persons or class of persons whom he intends or has reason to expect to act or to refrain from action in reliance upon the misrepresentation ..."). But see Gourdine, 405 Md. at 759-60, 955 A.2d
Despite the instances where recovery for fraud has been sanctioned where the allegedly fraudulent statement was not made directly to the plaintiff, we have not permitted recovery without a demonstration that the plaintiff relied, either directly or indirectly, on the relevant misrepresentation. For example, in Diamond Point Plaza, the defendant, Diamond Point, made a fraudulent misrepresentation to two lenders, Pinnacle and PaineWebber, "for the purpose of inducing Pinnacle and PaineWebber to extend a loan, aware that PaineWebber likely would sell the loan in the secondary market." 400 Md. at 741, 929 A.2d at 946. Wells Fargo bought the loan in the secondary market. Thus, we reasoned that Diamond Point had "reason to expect that the loan documents, including [the fraudulent misrepresentation], would be presented to, would be considered by, and would influence the decision of prospective buyers in the secondary market." Id. at 741-42, 929 A.2d at 946. Therefore, not only did Pinnacle and PaineWebber, the parties to whom the actual misrepresentation was made, rely, but so too did Wells Fargo, the third party buyer in the secondary market. Id. Although Diamond Point's representations were not made directly to Wells Fargo, Wells Fargo, as the third party, established reliance and resultant harm.
Appellees contend that, because we have permitted previously recovery where the allegedly fraudulent statement was not made directly to the plaintiff, recovery by Appellees for the statements made to Baltimore County and the MDE is justified in the present case. Reliance by Baltimore County or the State of Maryland is simply not enough, however.
Appellees argue that such an interpretation, in effect, immunizes corporate deceit to governmental officials. We disagree. Government is capable and empowered generally to take action in such instances to protect its interests and those of the public. Other parties meeting the elements of fraud may proceed properly on such an action if they so choose. Appellees, however, purely by virtue of being residents in the area, without more, cannot maintain an action for fraud based on false statements for which they have admitted no direct, indirect, or personal reliance. Thus, to the extent the jury verdict was dependent on the 1983 construction fraud, the 1992 permit fraud, and the 2001 double-walled piping fraud claims, it is unsupported.
Exxon argues that Appellees failed to prove by clear and convincing evidence the remaining three instances of alleged fraud: (1) sign fraud; (2) remediation fraud; and (3) remediation fraud in allegedly misleading affirmatively the MDE. Specifically, Exxon contends that, of the approximately 125 Appellees who testified that they saw the misleading sign, most did not provide any testimony lending itself to establishment of any detrimental reliance or change in their water consumption habits. Additionally, although 459 Appellees received awards for remediation fraud either personally or on the basis of the MDE's reliance, Exxon argues that at least 300 of these Appellees did not offer any testimony mentioning the alleged remediation fraud in the first instance, no Appellee proved detrimental reliance, and Appellees provided insufficient evidence to demonstrate that the MDE relied on any false statements.
Exxon contends that the sign fraud verdicts should be reversed. One-hundred, eighty-six Appellees recovered damages for sign fraud, stemming from the placement of the "misleading" sign outside of the Jacksonville Exxon station from 17 February until 21 February 2006. Exxon claims that of the 186 recovering Appellees, most either provided no testimony regarding seeing the sign in the first instance or "offered no evidence of detrimental reliance or continued using their well water even after they discovered the sign was inaccurate." Moreover, Exxon argues, those demonstrating reliance did not offer any evidence of resulting injury or damage.
As noted above, a false statement by a defendant does not alone provide a sufficient basis to support a cause of action for fraud. Rather, the plaintiff must prove by clear and convincing evidence that he or she relied on the allegedly fraudulent statement to his or her detriment. See Hoffman, 385 Md. at 28, 867 A.2d at 292. Here, Appellees' failure to demonstrate detrimental reliance is fatal to their claims. As Exxon notes, very few Appellees testified that they continued to use their well water after seeing the sign because they presumed the sign was correct, that they altered their water consumption following the discovery that the sign was misleading, or that they would have altered immediately their water consumption had the content of the sign been accurate at its installation. For example, many Appellees who asserted that they saw the sign did not begin using bottled water or install POET systems until well after the leak was publicized and the sign removed, therefore negating any claim
Of those Appellees that claimed to have relied on the misleading sign, none established that he or she suffered injury or damages as a result of his or her reliance. Appellees testifying as to reliance either did not have demonstrable contamination of their wells stemming from the Jacksonville Exxon leak until months after Appellees learned about the leak, or never had a positive well test for contamination. Thus, no Appellee proved by clear and convincing evidence any resulting injury from consuming contaminated water during the five-day period during which the sign was displayed. As a result, Appellees failed to establish a cause of action for fraud based on the posting of the "misleading" sign. The sign fraud verdicts as to all Appellees are therefore reversed.
Exxon urges this Court to reverse the fraud verdicts for the 459 Appellees who recovered for remediation fraud, claiming that they failed to prove fraud by clear and convincing evidence. Exxon challenges additionally the remediation fraud verdicts based on the reliance by the MDE on Exxon's remediation expertise. Lastly, Exxon complains that even the concept of remediation fraud is a violation of Exxon's due process rights, claiming that Appellees' theory of remediation fraud remained undefined and ever-shifting throughout the course of the trial.
The concept of remediation fraud appears to encompass various subtheories premised mainly on actions taken by Exxon during the remediation process. Appellees point to a number of Exxon's representations, including recovery estimates of gasoline proclaimed by Exxon, which later proved to be incorrect and were amended by a subsequent recovery estimate; statements made by Exxon officials predicting that the contamination would migrate, and thus be contained generally, to a "strike line" within a half-mile radius of the station, which was proved incorrect later; representations concerning the safety of the state action level for MTBE contamination; Exxon's decision to deliver or discontinue the delivery of bottled water; and, the decision of where to drill monitoring wells and sample for contamination.
We need not consider whether the amorphous concept of remediation fraud violated Exxon's due process rights. Upon our review of Appellees' testimony,
A mere false statement is insufficient to establish fraud. Even for those Appellees who could demonstrate the falsity of a statement, no Appellee proved by clear and convincing evidence detrimental reliance. Most Appellees did not demonstrate any change in behavior resulting from any of the allegedly false statements
Additionally, Appellees attempt to anchor a claim for remediation fraud based on Exxon's alleged deception of the MDE. Even assuming such a claim by Appellees is permissible under Maryland law, no representative of the MDE testified that Exxon misled intentionally the MDE, or that the MDE relied on Exxon's assertions. Any claim that Appellees relied on Exxon's representations to the MDE fails necessarily for the same reasons that Appellees' personal remediation fraud claims fail on this record. Appellees failed to prove any intentionally misleading statement, by clear and convincing evidence, that resulted in detrimental reliance.
Appellees' proof, rather than proving fraud, demonstrates a general dissatisfaction with Exxon's remediation efforts. The shortcomings in Exxon's remediation efforts (and reporting) simply do not rise to the level of fraud, however. Not only was the decision of where and when to test or install monitoring wells directed by the MDE, but many of the allegedly fraudulent statements made by Exxon were statements of opinion and prediction reflecting the available knowledge at the time. Appellees attempt to paint Exxon as attempting intentionally to deceive Jacksonville residents at every turn with a callous disregard for their health and safety, yet provide little but speculation as to Exxon's actual knowledge during the remediation process. Certainly, Exxon could have done a better job communicating with residents of the Jacksonville area, reduced errors, and described more clearly the investigatory process. That Exxon's efforts were imperfect, however, does not rise to fraud. Appellees did not prove by clear and convincing evidence that they relied justifiably, and to their detriment, on statements made with the intention to mislead by Exxon. In the absence of such proof, we reverse the jury's verdict for all Appellees as to the two asserted types of remediation fraud.
Because we reverse the verdicts as to each of the alleged instances of fraud submitted to the jury, the award to Appellees of punitive damages must be reversed as well. Punitive damages may be awarded only if a plaintiff proves at trial malice, ill will, or intent to injure. See, e.g., Ellerin v. Fairfax Savings, F.S.B., 337 Md. 216, 228-29, 652 A.2d 1117, 1122-23 (1995) (noting that Maryland law restricts recovery of punitive damages to situations where the defendant acted wrongfully intentionally); Owens-Illinois Inc. v. Zenobia, 325 Md. 420, 460, 601 A.2d 633, 652 (1992) (noting that punitive damages may be awarded only where "the plaintiff has established that the defendant's conduct was characterized by evil motive, intent to injure, ill will, or fraud, i.e., `actual malice'"). At the close of trial, Judge Dugan granted Exxon's Motion for Judgment on Plaintiffs' Claims for Punitive Damages based on Allegations of Evil Motive, Ill Will, or Intent to Injure. Appellees did not appeal that aspect of the court's decision. Because no basis for recovering punitive damages remains, we reverse the jury's award of punitive damages.
Exxon argues primarily that, because Appellees established neither the existence
We review the trial court's grant or denial of a motion for judgment notwithstanding the verdict to determine whether it was legally correct. Scapa Dryer Fabrics, Inc. v. Saville, 418 Md. 496, 503, 16 A.3d 159, 163 (2011) (quoting Scapa Dryer Fabrics, Inc. v. Saville, 190 Md.App. 331, 343, 988 A.2d 1059, 1065 (2010)). In so doing, we must "resolve all conflicts in the evidence in favor of the plaintiff and must assume the truth of all evidence and inferences as may naturally and legitimately be deduced therefrom which tend to support the plaintiff's right to recover." Smith v. Bernfeld, 226 Md. 400, 406, 174 A.2d 53, 55 (1961). If there is any competent evidence, "however slight, from which a rational mind could infer a fact in issue," then denial of a motion for judgment notwithstanding the verdict is appropriate. Impala Platinum v. Impala Sales, 283 Md. 296, 328, 389 A.2d 887, 905-06 (1978). Thus, if there is any evidence legally sufficient to generate a jury question, we must affirm the denial of a motion for judgment notwithstanding the verdict. Jones v. State, 425 Md. 1, 30-31, 38 A.3d 333, 350 (2012).
The decision whether to grant a motion for a new trial is "within the sound discretion of the trial court." Buck v. Cam's Broadloom Rugs, Inc., 328 Md. 51, 56, 612 A.2d 1294, 1296 (1992) (quoting Brinand v. Denzik, 226 Md. 287, 292, 173 A.2d 203, 206 (1961)). Thus, the trial court's denial of a motion for a new trial and/or remittitur will be reversed only upon a showing that the trial court abused its discretion in failing to order a new trial. Merritt v. State, 367 Md. 17, 28, 785 A.2d 756, 763 (2001).
In Maryland, recovery of damages for emotional distress must arise out of tortious conduct. Hamilton v. Ford Motor Credit Co., 66 Md.App. 46, 63, 502 A.2d 1057, 1066 (1986) ("Recovery may be had in a tort action for emotional distress arising out of negligent conduct. In such case, the emotional distress is an element of damage, not an independent tort."). The seminal case is Green v. T.A. Shoemaker & Co.,
With these concerns and principles in mind, the central issues to address in the present case are, first, whether recovery for emotional distress based on fear of contracting cancer that arose from a defendant's tortious act is permissible in Maryland;
We hold that, to recover emotional distress damages for fear of contracting a latent 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.
Faya v. Almaraz, 329 Md. 435, 620 A.2d 327 (1993),
Because the Faya plaintiffs tested negative for HIV over one year after their surgeries, we held that their continued fear of contracting the virus after the negative test was unreasonable as a matter of law. Id. at 455-56 & n. 9, 620 A.2d at 337 & n. 9. The plaintiffs therefore recovered for their mental distress only within a reasonable window of time: the time period between learning of the surgeon's HIV-positive status and their subsequent negative blood test. Id. at 459, 620 A.2d at 337. In triangulating this window of time, we concluded that the time period for which the plaintiffs could recover was approximately six months because evidence at the time showed that there was a 95% certainty that an individual will test positive for HIV, if at all, within six months after exposure. Id. The plaintiffs' fear within that particular time period, based on actual exposure to the virus by means of their surgeon's HIV-positive status, created an objectively reasonable fear of contracting HIV. Id. Faya thus demonstrates that there may be a reasonable "window," or measure, of time for which to recover for fear of future disease. Beyond that window of time, the likelihood of contracting
Exxon contends that the more stringent "reasonably certain" or "reasonably probable" standards to recover damages for fear of contracting future disease are applicable. See Pierce v. Johns-Manville Sales Corp., 296 Md. 656, 666-67, 464 A.2d 1020, 1026-27 (1983) (in a case decided before Faya, the Court adopted a reasonably certain ("greater than 50% chance") standard in holding that the plaintiff's cause of action for developing lung cancer as a result of asbestosis accrued when the presence of cancer was reasonably discovered in the cancer diagnosis, and not when he was diagnosed with asbestosis). See also Lohrmann v. Pittsburgh Corning Corp., 782 F.2d 1156, 1160 (4th Cir.1986) (interpreting Maryland law prior to Faya and holding that "recovery of damages based on future consequences of an injury" requires a reasonably probable standard, where the plaintiffs sought recovery for sustaining risks to cancer after being exposed to asbestos, and the district court excluded cancer testimony on the issue of damages). Lohrmann and Pierce, however, dealt with recovery of damages based on future consequences of an injury, namely, recovery for disease that may (or may not) develop in the future. By contrast, damages for fear of cancer are limited to recovery for present, particularized emotional distress based on an objective, reasonable fear as a matter of law. See Wetherill v. Univ. of Chicago, 565 F.Supp. 1553, 1559 (N.D.Ill.1983) (where a federal district court rejected the "reasonably certain" standard for recovery of feared disease because "such a stringent requirement would distort traditional notions of proximate cause. That concept's touchstone — reasonable foreseeability of the claimed injury [emotional distress] — merely demands a reasonable fear, not a high degree of likelihood, that the feared contingency be likely to occur.").
While cancer caused by chemical carcinogens and the transmission of HIV are clearly distinct vectors of different diseases, a fear of contracting any disease has several common principles as a matter of law. Faya provides a template for analogous cases involving fear of future disease: namely, that recovering emotional distress damages for fear of future disease requires a rational basis, based on objective circumstances, that the disease may occur because of actual exposure caused by a defendant's tortious conduct. These principles are supported by our precedent. See Smith v. Borello, 370 Md. 227, 247-48, 804 A.2d 1151, 1163 (2002) (a pregnant woman who suffers personal injury and the loss of the fetus due to a defendant's tortious conduct may recover for any demonstrable psychic injury, rather than sorrow, that arose as a result of losing the fetus, including depression, anguish, and distress); Beynon, 351 Md. at 507-08, 718 A.2d at 1184-85 (where an automobile crash caused the decedent plaintiff's fatal injuries, "[d]amages for `pre-impact fright' are recoverable when the decedent experiences it during the `legitimate window of mental anxiety,'" which was the time period between the decedent's realization that he was in "imminent" danger and his subsequent death (quoting Faya, 329 Md. at 459, 620 A.2d at 338-39)). See Buck v. Brady, 110 Md. 568, 572-73, 73 A. 277, 279 (1909) (a plaintiff was permitted properly to testify about her continuing fear of developing rabies after having been bitten by a rabid dog, even though she did not have the disease currently and had received immediate preventive treatment for the disease).
Our sister jurisdictions that permit recovery for fear of contracting cancer developed an array of guidance by which a
These jurisdictions differ, however, on how a plaintiff must prove his or her objectively reasonable fear. While expressing concerns similar to those we voiced in Vance and Green regarding the difficulty of proving genuine fear and consequent mental anguish, see supra, most jurisdictions require actual exposure. See, e.g., Meyer v. Lockformer Co., No. 02-C-2672, 2005 WL 1869656, at *4, 2005 U.S. Dist. LEXIS 15844, at *12 (N.D.Ill. Aug. 2, 2005) (no facts supported plaintiff's allegation of actual exposure to industrial solvent trichloroethylene (TCE)); Reynolds v. Highland Manor, Inc., 24 Kan.App.2d 859, 954 P.2d 11 (1998) (examining several states' different requirements for exposure in fear of HIV claims and noting that Kansas requires actual exposure). Many jurisdictions also require that the fear be genuine and a foreseeable result of the defendant's tortious conduct. See Bennett v. Mallinckrodt, Inc., 698 S.W.2d 854, 867 (Mo.Ct.App.1985) (in a case involving a denial of recovery for "cancerphobia," the court emphasized that such fear must have been foreseeable reasonably by the defendant); Ferrara v. Galluchio, 5 N.Y.2d 16, 176 N.Y.S.2d 996, 152 N.E.2d 249, 252 (1958) (explaining that, for recovery for fear of cancer, "[i]t is entirely possible to allow recovery only upon satisfactory evidence..., or to look for some guarantee of genuineness in the circumstances of the case").
Our assessment of these cases leads us to conclude that a plaintiff must have a rational basis to recover for fear of cancer. Therefore, recovery for fear of disease is allowed if the plaintiff proves he or she was exposed actually to a toxic substance, which created an objective, reasonable fear that the plaintiff will contract an identified disease. Mere exposure to a toxic substance is insufficient; rather, the circumstances of actual exposure to a toxic substance must lead a reasonable person in the plaintiff's position to believe that contracting a disease is a real consequence of the defendant's tortious conduct.
Jurisdictions considering the question are divided on whether a plaintiff must sustain additionally a physical injury to recover for fear of cancer. In Maryland, however, a plaintiff may recover damages for emotional distress "if a physical injury resulted from the commission of the tort, regardless of impact." Hoffman, 385 Md. at 34, 867 A.2d at 295 (emphasis in original). See Green, 111 Md. at 77, 73 A. at 691 (determining that recovery for mental distress damages should be permitted "when it is shown that a material physical injury has resulted from fright caused by a wrongful act, and especially, as in this case, from a constant repetition of wrongful acts, in their nature calculated to cause constant alarm and terror" (emphasis in original)). For example, in Green, we approved the admission of evidence showing the plaintiff's nervous condition, even though there was no physical impact with or corporal injury to her person. Id. A defendant's tortious conduct does not have to produce necessarily a physical impact for a plaintiff to recover emotional distress damages. A plaintiff must prove, however, a "clearly apparent and substantial physical injury" in one of four ways: (1) an external condition; or (2) symptoms of a resulting pathological; (3) physiological; or (4) mental state. Bowman v. Williams, 164 Md. 397, 404, 165 A. 182, 184 (1933) (emphasis added).
In Vance v. Vance,
Three key principles are thus relevant to determine whether a physical injury is capable of objective determination:
Hunt v. Mercy Med. Ctr., 121 Md.App. 516, 531, 710 A.2d 362, 369-70 (1998) (emphasis added).
The evidence in Vance of Muriel Vance's mental distress is a particularly effective example of an objective and demonstrable physical injury, as a matter of law:
286 Md. at 501, 408 A.2d at 734. We concluded that this evidence demonstrated an objectively demonstrable physical injury caused proximately by the defendant's negligence. Id. The requirement of an objective and demonstrable physical injury stands unchanged for claims of recovery for emotional distress. Compare New Summit Assocs. Ltd. P'ship v. Nistle, 73 Md.App. 351, 362-63, 533 A.2d 1350, 1355 (1987) (where the court found compensable emotional distress based on objective evidence of insomnia, diarrhea, and nausea, as a result of the tortious conduct), with Roebuck v. Steuart, 76 Md.App. 298, 315, 544 A.2d 808, 816 (1988) (where the court held there was no compensable emotional distress where the plaintiff's sole evidence of physical injury rested on testimony that she went to see a psychiatrist six times, but did not testify as to her own symptoms). See Belcher, Dobbins v. Washington Suburban Sanitary Comm'n, 338 Md. 341, 342-43, 658 A.2d 675, 675-76 (1995) (where, on two separate occasions, a water pipe of the defendant's broke and damaged the plaintiff's property, which plaintiff claimed caused her severe and permanent bodily injury and severe and "protracted shock" to her nervous system and mental anguish, this Court held that the plaintiff's alleged injuries were not caused proximately by the defendant's negligence); 329 Md. at 745-46, 621 A.2d at 890 (where the plaintiff provided ample and objective evidence that, as a result of defendant's tortious conduct, she suffered from nightmares, heart palpitations, headaches, and other mental anguish, and was diagnosed with Post Traumatic Stress Disorder, we held that she proved an objective and demonstrable physical injury);
In the context of physical injuries sustained as a result of exposure to toxic substances, subcellular change produced by exposure to toxic chemicals — without manifested symptoms of a disease or actual impairment — is not a compensable "injury" under Maryland law. See Hollingsworth & Vose Co. v. Connor, 136 Md.App. 91, 128, 764 A.2d 318, 338 (2000) (pleural plaques or thickening of blood or vessel walls caused by asbestos exposure is not a compensable injury). Likewise, most states decline to recognize subcellular or subclinical
With these standards in mind as to how a plaintiff must prove physical injury to recover damages for emotional distress in Maryland, we must determine how such standards apply to recovery of emotional distress damages for fear of contracting cancer. The majority of states allowing recovery for fear of cancer require that a plaintiff sustain a manifested and physical injury to prove an objective and reasonable fear of disease. See, e.g., Capital Holding Corp. v. Bailey, 873 S.W.2d 187,
For these reasons, we hold that to recover emotional distress damages for fear of contracting a 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.
As explained above, recovery of emotional distress damages for fear of contracting cancer requires that a plaintiff demonstrate that he or she has been exposed actually to a toxic chemical as a result of the defendant's tortious conduct. Thus, Appellees who did not demonstrate actual exposure to benzene or MTBE stemming from the Jacksonville Exxon leak cannot recover damages for fear of cancer. Here, eighty-eight Appellees recovered damages for emotional distress for fear of contracting cancer, yet did not provide evidence of any detectable contamination in their potable wells, air, or water vapors.
In addition to actual exposure, Appellees must demonstrate an objective, reasonable fear of developing cancer in order to recover emotional distress damages for fear of cancer. A plaintiff may demonstrate an objective reasonable fear by showing that he or she has a rational basis to believe reasonably that cancer is likely to develop as a result of exposure to toxic substances stemming from the defendant's tortious conduct. Here, Appellees contend that proof that the aquifer is contaminated with MTBE and benzene is sufficient to support a claim for emotional distress for fear of cancer, regardless of any actual, demonstrable exposure on an Appellee-specific basis. We determine that Appellees who were exposed actually to MTBE as a result of the Jacksonville Exxon leak (as determined by tests of their potable wells), but at levels below the relevant EPA and MDE action levels, cannot demonstrate an objective, reasonable fear of developing cancer.
For a fear to be objectively reasonable, it must be based on more than mere exposure to a chemical or contaminant of concern. The exposure must be sufficient, based on objective standards, to justify fear of disease. In Faya, for example, we noted that there was "current credible evidence of a 95% certainty that one will test positive for the AIDS virus, if at all, within six months after exposure to it." 329 Md. at 455, 620 A.2d at 337. Thus, we determined that it was only reasonable for the plaintiffs to fear contracting HIV or
Although individuals are exposed routinely and unfortunately in everyday life to MTBE and other carcinogenic toxins, low levels of exposure, absent a rational basis to support a fear of developing cancer, are not sufficient generally to justify an objectively reasonable fear. Here, similar to the circumstances in Faya, there is credible scientific evidence to suggest levels of exposure to benzene and MTBE at which a fear of developing cancer becomes objectively reasonable. The EPA and MDE establish routinely action levels, above which exposure to contaminants is deemed generally to be unsafe for human health. As admitted at trial, the relevant drinking water standards are 5 parts per billion for benzene, and 20 parts per billion
Only eight Appellees recovering emotional distress damages for fear of cancer offered well test results detecting contamination sufficient to create an objectively reasonable fear of developing cancer.
As we noted in Vance, claims for emotional distress need not be supported necessarily by expert medical testimony to establish injury and causation where "the causal connection is clearly apparent from the illness itself and the circumstances surrounding it, or where the cause of the injury relates to matters of common experience, knowledge, or observation of laymen." Id. at 502-03, 408 A.2d at 734-35 (quoting Wilhelm v. State Traffic Safety Comm'n, 230 Md. 91, 99, 185 A.2d 715, 719
None of the remaining Appellees, with the exception of Gloria Quinan, presented expert testimony attributing their alleged physical injury to the Jacksonville Exxon leak. Therefore, we reverse the jury awards for emotional distress for fear of contracting cancer to Amy Gumina, Van Ho, Barbara Larrabee, John Larrabee, Edward Odend'hal, Nanette Odend'hal, and Anna Walega.
Only one Appellee demonstrating an objectively reasonable fear of developing cancer, Gloria Quinan, presented expert testimony linking her claimed physical injury to the Jacksonville Exxon release. In reviewing Quinan's claims for emotional distress for fear of cancer to determine if there was sufficient evidence to support her claim as a matter of law, we must resolve all conflicts in the evidence in her favor. See Houston v. Safeway Stores, Inc., 346 Md. 503, 521, 697 A.2d 851, 859 (1997) ("Only where reasonable minds cannot differ in the conclusions to be drawn from the evidence, after it has been viewed in the light most favorable to the plaintiff, does the issue in question become one of law for the court and not of fact for the jury." (quoting Pickett v. Haislip, 73 Md.App. 89, 98, 533 A.2d 287, 291 (1987))).
As noted previously, the Court of Special Appeals in Hunt provided guidance for determining whether an injury is capable of objective determination. The evidence offered in support of physical injury "must contain more than mere conclusory statements," and be sufficiently detailed "to give the jury a basis upon which to quantify the injury." Hunt, 121 Md.App. at 531, 710 A.2d at 369. Moreover, because the requirement for physical injury must be viewed objectively, and is designed to protect against feigned claims, a claim for emotional distress damages is more likely to succeed "if the victim is [not] the sole source of all evidence of emotional injury." Id. Lastly, although more severe injuries may be more likely "capable of objective determination," there is no threshold severity requirement for establishing compensable physical injury. Id. at 531, 710 A.2d at 369-70.
In Hunt, the decedent plaintiff,
Here, in support of her claim for emotional distress for fear of contracting cancer, Quinan testified on her own behalf and presented the testimony of Dr. Abdul Malik, a psychiatrist, who examined Quinan.
Dr. Malik testified that Quinan was "angry and frustrated and concerned" that she had been drinking and bathing in her well water from 2006 until the first positive detection of contamination of her well in April of 2009.
Although the testimony proffered by Quinan and Dr. Malik does not rise to the level of detail observed in Hunt, we conclude that the evidence presented was sufficient to create a jury question as to whether Quinan suffered an injury capable of objective determination. Quinan provided testimony regarding the duration and extent of her physical symptoms. Moreover, although much of Dr. Malik's testimony contained conclusory statements which otherwise might be insufficient to establish physical injury, he testified regarding his examination and diagnosis of anxiety disorder. Although we recognize that anxiety disorder not impacting normal functioning is less severe than the physical injuries asserted in Vance, as the Court of Special Appeals noted in Hunt, "[t]here is no severity prong of the Vance test." 121 Md.App. at 531, 710 A.2d at 370. Thus, "although minor emotional injuries may be less likely to produce the kind of evidence that renders an injury capable of objective determination, that does not mean that an emotional injury must reach a certain threshold level of severity before it becomes compensable." Id. at 531, 710 A.2d at 369-70. Therefore, even though Dr. Malik testified that Quinan remained able to function normally in spite of her diagnosed anxiety disorder, we conclude there is sufficient evidence, considered in the light most favorable to Quinan, to submit her claim to the jury. Therefore, we shall direct remand for Quinan's claim for emotional distress damages for fear of contracting cancer to the trial court for a new trial.
Although the trial court permitted nearly every Appellee's claim for damages for
The possibility of recovery of damages for medical monitoring in Maryland was raised, but not decided by this Court, in Philip Morris, Inc. v. Angeletti, 358 Md. 689, 779-80, 752 A.2d 200, 250 (2000).
We agree now with other jurisdictions that recognize that "exposure itself and
While problems may arise in limiting the potentially expansive class of plaintiffs in medical surveillance awards, see Metro-North Commuter R.R. Co. v. Buckley, 521 U.S. 424, 442-43, 117 S.Ct. 2113, 2122-23, 138 L.Ed.2d 560, 576 (1997), permitting only proven necessary medical costs helps prevent the danger of awarding medical monitoring for speculative injuries, a risk inherent in the area of other common law torts, such as emotional distress.
Although in Angeletti we considered the possibility that a plaintiff may recover for damages for medical monitoring either as an independent cause of action or as an element of damages, we noted that a "medical monitoring claim may perhaps more accurately be deemed a remedy rather than a distinct cause of action." 358 Md. at 786, 752 A.2d at 253. See also Potter v. Firestone Tire & Rubber Co., 6 Cal.4th 965, 25 Cal.Rptr.2d 550, 863 P.2d 795, 823 (1993) (holding that a defendant's conduct creating the need for future medical monitoring "does not create a new tort. It is simply a compensable item of damage when liability is established under traditional tort theories of recovery."); James A. Henderson & Aaron D. Twerski, Asbestos Litigation Gone Mad: Exposure-Based Recovery for Increased Risk, Mental Distress, and Medical Monitoring, 53 S.C. L.Rev. 815, 840 (2002) (academic commentators concluded that those states that allow recovery for medical monitoring did not create new causes of action, but rather recognized a new form of tort remedy).
Likewise, our sister jurisdictions that allow recovery for medical monitoring, more often than not, allow such recovery as a remedy, rather than as an independent cause of action. See Xavier v. Philip Morris USA Inc., No. C 10-02067, 2010 WL 3956860, at *3-*4, 2010 U.S. Dist. LEXIS 107959, at *8-*9 (N.D.Cal. Oct. 8, 2010) (dismissing stand-alone medical monitoring claim, but recognizing that California allows a medical monitoring claim as a remedy); Mann v. CSX Transp., Inc., No. 1:07-CV-3512, 2009 WL 3766056, at *2-*3, 2009 U.S. Dist. LEXIS 106433, at *7 (N.D.Ohio Nov. 10, 2009) (medical monitoring recognized as a form of tort damages in Ohio); Duncan v. Northwest Airlines, Inc., 203 F.R.D. 601 (W.D.Wash.2001) (declining to create new and independent tort for medical monitoring because flight attendants exposed to second-hand smoke, with present injury, could seek medical monitoring as remedy to a negligence cause of action); Meyer v. Fluor Corp., 220 S.W.3d 712 (Mo.2007) (medical monitoring is a compensable element of damage if liability is demonstrated under traditional tort theories of recovery); Badillo v.
The United States Supreme Court noted that "an exposed plaintiff can recover related reasonable medical monitoring costs [as an element of damages] if and when he develops symptoms." Buckley, 521 U.S. at 438, 117 S.Ct. at 2121, 138 L.Ed.2d at 573. By contrast, there is a divided array of states that allow medical monitoring based on different threshold standards. Compare Remson v. Verizon Commc'ns, Inc., No. CV 07-5296, 2009 WL 723872, 2009 U.S. Dist. LEXIS 20310 (E.D.N.Y. Mar. 13, 2009) (finding that, in New York, recovery for medical monitoring is allowed as long as the plaintiff alleges exposure to an allegedly toxic chemical and a rational basis for belief of contracting a disease), with Parker v. Brush Wellman, Inc., 377 F.Supp.2d 1290, 1296, 1302 (N.D.Ga.2005) (where plaintiffs claimed a "subclinical" condition due to toxic exposure, but lacked any contemporaneous physiological manifestations, the court concluded that Georgia does not recognize a medical monitoring action without a showing of physical injury). When those costs are deemed "reasonable," and irrespective of whether actual physical "symptoms" of the toxic substance-induced disease are required to recover such costs, is what we must determine in the present case.
The weight of authority across the country recognizes that recovery for costs of medical monitoring is limited to costs that are necessary and reasonable. The seminal case recognizing compensable damages for medical monitoring seems to be Ayers v. Jackson, 106 N.J. 557, 525 A.2d 287 (1987). The New Jersey Supreme Court held that a group of plaintiffs could recover medical surveillance costs for toxic exposure after their Township contaminated the town aquifer and consequently their well water, even though no plaintiff had developed symptoms of exposure-related disease that were "quantified" by the evidence, if such monitoring were found to be reasonably necessary. Id. at 312-14. The court articulated certain factors to consider in defining the meaning of "reasonably necessary."
To determine whether monitoring is reasonably necessary, several courts have established specific multi-factor tests, such as that adopted by the Supreme Court of California:
Potter, 25 Cal.Rptr.2d 550, 863 P.2d at 824-25; see also Paoli I, 916 F.2d at 852 (identifying analogous factors to consider in awarding compensable damages for medical surveillance);
Keys to a plaintiff's recovery are evidence of causation (from the defendant's tortious conduct) and a significantly increased risk of contracting a latent disease. For example, in Theer v. Philip Carey Co., 133 N.J. 610, 628 A.2d 724 (1993), the New Jersey Supreme Court held that recovery for medical monitoring may be obtained only by plaintiffs who have "experienced direct and hence discrete exposure to a toxic substance and who have [] suffered an injury or condition resulting from that exposure and whose risk of cancer [can] be limited and related specifically and tangibly to that exposure." Id. at 733 (emphasis added). Hence, a plaintiff who was exposed to asbestos by laundering her husband's clothes had no medical monitoring claim because evidence linking any potential risk of cancer to the defendant's tortious conduct was tenuous; also, the plaintiff was a smoker. Id. Courts have concluded, moreover, that an increased or different monitoring of a latent disease, even due to a preexisting condition caused by a plaintiff's voluntary conduct, may create entitlement to recover damages, as long as there is reliable evidence that the increased risk is a direct and proximate result of the exposure to
Although we recognize that the injury giving rise to an alleged need for medical monitoring costs is the exposure to toxic substances, and that this exposure is an invasion of a legally-protected interest, see Hansen, 858 P.2d at 977, we are wary of damages for speculative claims resting on tenuous proof of risk of disease attributable to the type of exposure. In evaluating at "what stage in the evolution of a toxic injury should tort law intercede by requiring the responsible party to pay damages[,]" Ayers, 525 A.2d at 298, we believe that, by its nature, recovery for a latent disease due to toxic exposure involves necessarily somewhat nebulous forecasts of a potential risk to develop a disease in the future. We recognize that, because of the "latent nature of most diseases resulting from exposure to toxic substances,... most toxic-tort plaintiffs cannot establish an immediate physical injury of the type contemplated in traditional tort actions ... [because] the physical injury... manifests itself years after exposure." Hansen, 858 P.2d at 977. Requiring quantifiable and reliable proof, however, will assist courts in determining whether causation and significant risk are present in a plaintiff's prima facie case.
For a fact finder to "ascertain the probability" that the remedy of medical monitoring is appropriate, Paoli I, 916 F.2d at 852, proof of a "significantly increased risk" of developing a future disease, based on reliable expert testimony quantifying the risk, is necessary. See id. at 851 (requiring medical expert testimony to demonstrate a plaintiff's need for reasonable and necessary medical costs); Donovan, 914 N.E.2d at 901 ("When competent medical testimony establishes that medical monitoring is necessary to detect the potential onset of a serious illness or disease due to physiological changes indicating a substantial increase in risk of harm from exposure to a known hazardous substance, the element of injury and damage will have been satisfied and the cost of that monitoring is recoverable in tort."). Otherwise, it is difficult for a reasonable fact finder to measure "the relative increase in the chance of onset of disease in the exposed plaintiff as a result of the exposure, when compared to (a) the plaintiff's chances of developing the disease had he or she not been exposed, and (b) the chances of the members of the public at large of developing the disease." Potter, 25 Cal.Rptr.2d 550, 863 P.2d at 824-25.
Quantifiable and reliable indicators of risk in developing disease are also helpful to determine a "significant" increase in risk of disease, thus ensuring that the nature and extent of medical monitoring is actually greater than that which should be undertaken by the general population, a key purpose in awarding appropriate medical monitoring damages. Id. at 825 (noting that "there can be no recovery for preventative medical care and checkups to which members of the public at large should prudently submit").
Hence, we conclude that quantifiable, reliable indicia that a defendant's actions have so increased significantly the plaintiff's risk of developing a disease are necessary to recover damages for medical monitoring costs. The indicia may be proven by a medical expert's testimony, particularized to a plaintiff, and demonstrating a reasonable link to toxic exposure. This requirement helps to achieve the objective of medical monitoring — that a defendant must compensate a plaintiff for past or present injuries caused by the defendant — and inhibits damages awards for speculative, and thus unreliable, opinions as to a plaintiff's potential risk of developing a future disease.
We conclude, as have the majority of our sister jurisdictions, that evidence of physical injury is not required to support costs for medical surveillance. A compelling illustration of why proof of physical injury is not needed for this form of relief is Friends for All Children, Inc. v. Lockheed Aircraft Corp., 746 F.2d 816, 818-19 (D.C.Cir.1984), where recovery for medical monitoring was permitted, without proof of physical injury, where the defendant caused proximately a present physical manifestation of the plaintiff children who developed brain dysfunctions. The plaintiff organization, on behalf of 149 Vietnamese orphans who survived a plane crash during the evacuation of Vietnam in 1975, sued Lockheed, alleging that because of decompression, as well as the crash, the children suffered from a neurological disorder that was classified generically as Minimal Brain Dysfunction. Id. Initial medical diagnosis trials were conducted for selected children to provide necessary information about probable litigation results. Id. at 820-22. Lockheed did not deny liability for compensatory damages, but disputed that the crash was a cause of the need for medical diagnostic tests. Id.
The federal court rejected the argument that the need for diagnostic examination was not a compensable injury, and affirmed the imposition on Lockheed of liability for diagnostic examination expenses because the need for such examinations was the proximate result of the crash. Id. at 825-26. Even without further proof of injury, the court held, a reasonable need for medical examinations was compensable. Id. at 826. The court held further that a reasonable need for medical examinations was itself compensable, without proof of other injury: "[i]t is difficult to dispute that an individual has an interest in avoiding expensive diagnostic examinations just as he or she has an interest in avoiding physical injury. When a defendant negligently invades this interest, the injury to which is neither speculative nor resistant to proof, it is elementary that the defendant should make the plaintiff whole by paying for the examinations." Id. (emphasis added).
As we discussed earlier, the physical injury a plaintiff suffers in a claim for recovery for medical surveillance costs is the invasion of a legally-protected interest. See Hansen, 858 P.2d at 977. Hence, we believe that, as long as the plaintiff presents proof that the significantly increased risk of contracting a latent disease is not "speculative," Friends, 746 F.2d at 826, but is instead reasonably certain based on reliable evidence, there is no need that such plaintiff sustain an actual physical harm to recover damages.
We note with approval the recent tendency of many courts that award medical monitoring costs to do so by establishing equitably a court-supervised fund, administered by a trustee, at the expense of the defendant. See Exxon Mobil Corp. v. Ford, 204 Md.App. 1, 144, 40 A.3d 514, 598 (2012) (J. Eyler, J., concurring and dissenting in part), aff'd in part and rev'd in part, 432 Md. 1, 67 A.3d 1061, 2013 WL 673710 (2013) ("In our view, the alternative that best achieves the goal of medical monitoring is that a court, in the exercise of its equitable powers, can establish a fund, when justified by the evidence, to be administered by a trustee, at the expense of the defendant."). See also Buckley, 521 U.S. at 441, 117 S.Ct. at 2122, 138 L.Ed.2d at 574. This approach helps ensure that the medical surveillance funds will be used for their intended purpose, while still achieving the objectives of the medical
Buckley, 521 U.S. at 440-41, 117 S.Ct. at 2122, 138 L.Ed.2d at 574.
The District Court of Appeals of Florida, holding that future medical monitoring costs are compensable in Florida, determined that a Florida trial court could use its equitable powers to create a fund for medical monitoring recovery, if the plaintiff established a prima facie case for recovery. Petito v. A.H. Robins Co., 750 So.2d 103, 106 (Fla.Dist.Ct.App.1999). The court outlined specific guidelines for a trial court to follow if it decided that a fund was appropriate, such as: (1) appoint a plan administrator; (2) with the administrator's advice, approve an advisory panel of persons qualified and knowledgeable in the relevant medical field or fields to supervise, among other things, the persons who consume or undergo medication and treatment, and select a list of skilled and neutral examining physicians to perform the medical tests; (3) establish a time frame for those eligible to obtain the monitoring; and, (4) authorize the plan administrator to pay the reasonable amounts of claims based on submitted reports and findings by the monitoring physicians. Id. at 107. For these procedures to operate effectively, they "must be tailored to fit the facts in a given case." Ford, 204 Md.App. at 146, 40 A.3d at 599 (J. Eyler, J., concurring and dissenting in part).
In sum, we hold that Maryland recognizes a remedy of recovery for medical monitoring costs resulting from exposure to toxic substances resulting from a defendant's tortious conduct. To sustain an award for recovery for medical costs, a plaintiff must show that reasonable medical costs are necessary due to a reasonably certain and significant increased risk of developing a latent disease as a result of exposure to a toxic substance. In awarding relief, a court must consider whether the plaintiff has shown: (1) that the plaintiff was significantly exposed to a proven
To determine what is a "significantly increased risk of contracting a latent disease" for a particular plaintiff, the court may consider quantifiable and reliable medical expert testimony that indicates the plaintiff's chances of developing the disease had he or she not been exposed, compared to the chances of the members of the public at large of developing the disease. We hold further that, where a plaintiff sustains his or her burden of proof in recovering this form of relief, the court should award medical monitoring costs ordinarily by establishing equitably a fund, administered by a trustee, at the expense of the defendant.
Appellees' claims for medical monitoring damages suffer from various deficiencies of proof under the tests set out above. Specifically, because Appellees with no detected contamination have not demonstrated sufficiently that they were exposed significantly to a proven hazardous substance, they may not recover damages for medical monitoring.
As noted earlier, we review the trial court's denial of Exxon's motion for judgment notwithstanding the verdict to determine whether it was legally correct. Scapa Dryer Fabrics, 418 Md. at 503, 16 A.3d at 163. At the conclusion of the trial, the jury awarded Appellees damages for injury to real property of three principal types: (1) emotional distress for fear of property value loss and fear of loss of use and enjoyment; (2) diminution in value, measured by the difference in value between the day immediately preceding the announcement of the leak and the day immediately subsequent to the announcement of the leak; and (3) loss of use and enjoyment for the period spanning from the day immediately subsequent to the discovery of the leak until the commencement of trial. Exxon challenges these awards as contrary to Maryland law, duplicative, speculative, and grossly excessive. Specifically, Exxon contends that emotional distress damages for fear of injury to property is not compensable, that Appellees' recovery of damages for both diminution in value and past loss of use and enjoyment constitutes impermissible double compensation, that awards to Appellees not experiencing well contamination were improper and speculative, and that the jury awards were excessive and based on inadmissible expert testimony.
The jury awarded approximately one hundred and ninety-five Appellees emotional distress damages for fear of loss of property value and fear of loss of use
We need not reach the latter contentions. Ordinarily, as Judge James Eyler of the Court of Special Appeals noted in Ford, in the absence of fraud, malice, or like motives, "emotional distress attendant to property damage is not compensable." Ford, 204 Md.App. at 101, 40 A.3d at 573 (J. Eyler, J., concurring and dissenting in part). See also H & R Block, Inc. v. Testerman, 275 Md. 36, 48-49, 338 A.2d 48, 55 (1975) (stating that "Maryland decisions have generally denied compensation for mental anguish resulting from damage to property"); Zeigler v. F. Street Corp., 248 Md. 223, 226, 235 A.2d 703, 705 (1967) (noting that emotional distress damages attendant to injury to property may be recovered only where there is fraud or malice). Because, as we explained supra, we reverse the fraud award in this case,
The jury awarded to Appellees, in many instances, damages for both diminution in property value and past loss of use and enjoyment of real property, over Exxon's objection. Prior to trial, Judge Dugan required Appellees to elect between pursuit of damages for diminution in value and prospective loss of use and enjoyment, noting that the forms of relief are duplicative. Appellees elected to pursue damages for diminution in value of real property, rather than prospective loss of use and enjoyment. In addition, however, Judge Dugan permitted Appellees to seek damages for past loss of use and enjoyment,
Exxon contends that the awards for past loss of use and enjoyment are duplicative of (and subsumed by) the awards for diminution in value, and therefore the trial court erred in permitting recovery of both. Because diminution in value of real property, measured on the date the leak was discovered, encompasses necessarily the lost use and enjoyment of that real property suffered by the property owner from that date forward, Exxon contends that there remains no period of time for which Appellees are eligible for lost use and enjoyment damages. Moreover, Exxon avers that, even if Appellees were entitled to receive both types of damages, the awards for loss of use and enjoyment are excessive because they, in conjunction with the diminution in value damages, exceeded frequently the unimpaired value of the real property. In retort, Appellees contend that their recovery of damages for diminution in value, in addition to past loss of use and enjoyment for the period between the announcement of the leak and the commencement
Assuming that the trial court required properly Appellees to elect between pursuing either diminution in value or prospective loss of use and enjoyment damages, and Appellees were in fact entitled to receive damages for diminution in value,
Compensation for injury to real property is dependent generally upon the character of the harm. See, e.g., Hall v. Lovell Regency Homes Ltd. P'ship, 121 Md.App. 1, 23-24, 708 A.2d 344, 355 (1998) (noting that permanent harm to property is measured properly by the permanent diminution in the property's value, while temporary harm may be measured by the decrease in the value of the property's use and enjoyment or by the cost of restoring the property to its unimpaired state). Diminution in value of real property is available generally as the remedy for damages in actions where the injury to real property is permanent in nature. Goldstein v. Potomac Elec. Power Co., 285 Md. 673, 682, 404 A.2d 1064, 1068 (1979). In addition to damages for permanent diminution in value of real property, an individual whose real property has suffered permanent injury may also recover the loss in the "usable value" of his property and any consequential damages incurred, provided that neither is encompassed within the diminution in value. See Maxa, 177 Md. at 182-83, 9 A.2d at 242 (permitting a property owner to collect damages for diminution in value as a result of his property's loss of water access, in addition to the consequential damages incurred by plaintiff for having to store his boat in an alternate location); Restatement (Second) of Torts § 929 Cmt. d (noting that a plaintiff may recover loss of use and enjoyment damages, in addition to diminution in value, provided that the loss of use and enjoyment award is not encompassed within the diminution in value of the real property).
Diminution in value damages are appropriate where the injury is considered permanent because such damages compensate presumably the property owner fully for the injury to his or her land and improvements. Damages for diminution in value are determined by calculating the difference between the fair market value of the property immediately preceding
The definition of fair market value suggests that an agreement as to price between the prospective buyer and prospective seller necessarily takes into account any known defects or deleterious conditions in the property.
Owners of real property, however, are not precluded necessarily from recovering
In Mayor & City Council of Havre de Grace v. Maxa, we considered whether an individual suffering permanent injury to property by virtue of a town dredging improperly fill material and depositing it onto his property (cutting off his water frontage and access) could recover damages for loss of "usable value" in addition to diminution in market value. 177 Md. at 182-83, 9 A.2d at 242. Noting that an individual may not recover twice for the same injury, but that an individual is entitled to "complete" compensation, we permitted recovery of damages for loss in market value as well as loss in "usable value." Id. We defined "usable value" as "the personal enjoyment and use by the plaintiffs as occupiers of the premises, independently of the difference in market value." Id. at 182, 9 A.2d at 242. In Maxa, the plaintiff was permitted to recover, as loss in "usable value," boat storage and wharfage fees, which constituted an additional expense that the plaintiff was forced to bear in order to obtain the same benefit from his property from what he was deprived of by the defendant's conduct. Thus, the plaintiff recovered damages for diminution in value, as well as loss of use and enjoyment in the form of consequential damages — as an additional expense incurred by the plaintiff as a direct result of the defendant's tortious conduct.
In Hall v. Lovell Regency Homes, the Court of Special Appeals determined that the plaintiffs could not recover both diminution in value and loss of use and enjoyment damages, based on breach of contract, caused by drainage problems left behind by their builder's construction of the subdivision and their homes. 121 Md. App. at 25, 708 A.2d at 356. The plaintiff homeowners in Hall sought damages for diminution in value as a result of damage done essentially to their basements, as well as loss of use and enjoyment based on the following:
Id. Because the alleged loss of use and enjoyment was, in effect, the same as the condition that diminished the market value of their properties, the court determined that "[t]he damages the homeowners were seeking for the loss of use of their basements (and their yards) were subsumed in and were not distinguishable from the damages that they were seeking for loss in fair market value of their properties." Id.
Although Appellees' claims differ qualitatively from those in Hall, in that Appellees suffered injury as a result of Exxon's tortious, rather than contractual, wrongdoing, the principle set forth in both Hall and Maxa applies to the present case.
Unlike the plaintiff in Maxa, who recovered consequential damages for loss of use and enjoyment resulting from his payment for alternative boat storage charges — a defined expense caused directly by the defendant and not encompassed necessarily within the value and expected use of the home itself — the contentions here are, like in Hall, largely subsumed within the claim for diminution in market value.
The potable wells on the properties of approximately sixty-five Appellees or Appellee families did not test positive for either benzene or MTBE contamination as of the time of trial.
Appellees contend that the mere existence of any contamination in the aquifer from which the non-detect Appellees draw their water permits the non-detect Appellees to recover damages for injury to property on a theory of trespass, by virtue of the potential for future detected contamination. Appellees are mistaken. An action for trespass may lie "[w]hen a defendant interferes with a plaintiff's interest in the exclusive possession of the land by entering or causing something to enter the land." Rosenblatt v. Exxon Co., U.S.A., 335 Md. 58, 78, 642 A.2d 180, 189 (1994). Thus, recovery for trespass requires that the defendant must have entered or caused something harmful or noxious to enter onto the plaintiff's land. See, e.g., Toy v. Atlantic Gulf & Pacific Co., 176 Md. 197, 205-06, 4 A.2d 757, 761-62 (1939) (noting that because the premises of the plaintiffs was not physically invaded, an action in trespass cannot lie). Here, the non-detect Appellees failed to demonstrate any physical intrusion of their land. General contamination of an aquifer that may or may not reach a given Appellee's property at an undetermined point in the future is not sufficient to prove invasion of property. Thus, the non-detect Appellees could not recover, at the time of trial, damages for diminution in value of property based on a theory of trespass.
Exxon contends that the non-detect Appellees may not recover damages for diminution in value under a theory of nuisance because the interference with their properties is not substantial. A cause of action for nuisance does not require present proof of contamination. See Yarema, 69 Md.App. at 147-49, 516 A.2d at 1003-04. Private nuisance is "a nontrespassory invasion of another's interest in the private use and enjoyment of land." Wietzke v. Chesapeake Conf. Ass'n, 421 Md. 355, 374, 26 A.3d 931, 943 (2011) (quoting Rosenblatt, 335 Md. at 80, 642 A.2d at 190 (quoting Restatement (Second) of Torts § 821D)). Not every interference with a plaintiff's use and enjoyment of land, however, will support a cause of action for nuisance. WSSC, 330 Md. at 143, 622 A.2d at 749 (citing Adams v. Michael, 38 Md. 123, 126 (1873)). See Wietzke, 421 Md. at 382-83, 26 A.3d at 948 (noting that a finding of nuisance involves "a balance of the competing property interests at stake"). To succeed on a nuisance claim, a plaintiff must establish an unreasonable and substantial interference with his or her use and enjoyment of his or her property, such that the injury is "of such a character as to diminish materially the value of the property as a dwelling ... and seriously interfere with the ordinary comfort and enjoyment of it." WSSC, 330 Md. at 143-44, 622 A.2d at 759 (quoting Slaird v. Klewers, 260 Md. 2, 9, 271 A.2d 345, 348 (1970)).
In Exxon Corp. v. Yarema, the Court of Special Appeals considered whether property owners, who had not demonstrated any physical injury to property from contamination resulting from a gasoline leak, could recover in nuisance despite the absence of tangible or physical harm. 69 Md.App. 124, 516 A.2d 990. Noting that Maryland courts permitted recovery for nuisance resulting from the intangible
In order to get to the jury on their claimed cause of action in nuisance, therefore, Appellees without demonstrable contamination were obliged to establish that Exxon's tortious actions unreasonably and substantially interfered with their use and enjoyment of their properties. In Yarema, the court determined that the property owners demonstrated a substantial interference due to the "crippling restrictions" imposed on the property owners by Baltimore County government officials. 69 Md.App. at 153, 516 A.2d at 1005. Specifically, owners of contaminated and surrounding non-contaminated properties were forbidden from using their water, constructing homes, or selling their land. Id. Thus, the Yarema court distinguished the plaintiffs' injury from cases in which only the reputation of the plaintiffs' land was harmed as a result of the defendant's actions, see, e.g., McCaw v. Harrison, 259 S.W.2d 457, 458 (Ky.1953) (a cemetery did not constitute a nuisance "merely because it is a constant reminder of death and has a depressing influence on the minds of persons who observe it, or because it tends to depreciate the value of property in the neighborhood, or is offensive to the aesthetic sense of the adjoining proprietor"); Gray v. Southern Facilities, Inc., 256 S.C. 558, 183 S.E.2d 438, 443 (1971) (no recovery for nuisance when the "claim for damages is predicated upon an asserted diminution in market value resulting, not from any physical injury, but from a psychological factor, in that prospective buyers allegedly would be reluctant to purchase the property due to the fear of a similar occurrence in the future"). Yarema, 69 Md.App. at 152-53, 516 A.2d at 1004-05.
Here, however, although there is no dispute that any interference with Appellees' properties by Exxon was unreasonable, there is little to suggest that Appellees with non-detect results experienced a substantial interference. Unlike the plaintiffs in Yarema, the gravamen of Appellees' complaints consist largely of relatively minor disturbances and stigma impacts that are not comparable to the severe restrictions placed on the Yarema plaintiffs. Although interference with the use and enjoyment of property, in the absence of physical impact, need not rise necessarily to the level of the restrictions in Yarema to constitute a nuisance, the disturbances reported in this case fall well on the opposite end of the continuum and are insufficient to maintain a nuisance action. For example, most non-detect Appellees complain primarily of using bottled water or Brita filters, entertaining in and about their homes less than expected, reducing the frequency of use of outdoor spaces,
Moreover, Appellees' adjustments in the use of their properties appear to derive not from Exxon's actual interference with their property, but rather from their fear of contamination and its possible impacts. In order to recover for nuisance, however, a plaintiff must establish that any adjustments he, she or it makes in the use of his, her, or its property as a result of the defendant's tortious conduct are objectively reasonable. See, e.g., Gorman, 210 Md. at 159, 122 A.2d at 477 (noting that, to recover for nuisance, the disturbance alleged must be "offensive or inconvenient to the normal person"). As noted above in our discussion of fear of contracting cancer, however, these Appellees' fear of future contamination and resultant effects thus far is not objectively reasonable. They have no detected contamination, nor been advised that their water is unsafe for use. Unlike the plaintiffs in Yarema, Appellees have not received communication from governmental entities that would lead them to believe reasonably that alteration of water use is necessary to protect their health. Thus, in the absence of physical injury to real property resulting from Exxon's actions, Appellees must demonstrate more than modest adjustments in their use of their real property resulting from the leak in order to establish nuisance. Because this category of Appellees have not demonstrated that Exxon's interference with the use and enjoyment of their land was substantial, they may not recover damages for diminution in value of real property on the grounds that Exxon's actions constituted a nuisance.
The Yarema court concluded also that no proof of physical harm to property is required to recover under a negligence or strict liability theory.
The alleged injury to the non-detect Appellees' properties here, however, is different in kind than that suffered by the plaintiffs in Toy. In Toy, the defendant's actions deprived the plaintiffs of substantial benefits of their property — specifically, their right of access by water and the use and enjoyment of the carp pond on their property. Id. at 207, 4 A.2d at 762-63. The non-detect Appellees here, however, have proven no analogous injury. In the absence of direct evidence of physical injury, Appellees must show more than a possibility of future contamination or mere annoyance in order to recover. Although we do not determine expressly that it need rise to the level of the interference in Yarema or Toy, there is insufficient evidence on which to base recovery for the non-detect Appellees on the record of this case. The diminution in real property value suffered by these Appellees is, without more, damnum absque injuria — a loss without legal injury.
It appears to us that only four Appellees may maintain a claim for loss of use and enjoyment of real property: Amy Gumina, Van Ho, and Leslie and Timothy Tripp. Exxon conceded that it was liable to Ms. Ho and to the Tripp family for compensatory damages, but did not specify which type of damages.
Exxon asserts that the loss of use and enjoyment awards are excessive and that the trial court should have granted its motion for a new trial and/or remittitur. We review the trial court's denial of a motion for a new trial and/or remittitur under an abuse of discretion standard. Merritt, 367 Md. at 28, 785 A.2d at 763. As we noted, we will reverse a trial court's denial of a motion for remittitur only where the verdict is "`grossly excessive' or `shocks the conscience of the court.'" Banegura v. Taylor, 312 Md. 609, 624, 541 A.2d 969, 976 (1988) (citations omitted).
Compensatory damages awards "attempt to make the plaintiff whole again by monetary compensation." Yarema, 69 Md.App. at 137, 516 A.2d at 997. Although, as the Court of Special Appeals noted in Yaffe v. Scarlett Place Residential Condo., Inc., determining damages for loss of use and enjoyment "must be flexible and based on the factual circumstances of each case," 205 Md.App. 429, 450, 45 A.3d 844, 856 (2012), such damages must also be capable generally of reasonable measurement, rather than purely speculative. See McAlister v. Carl, 233 Md. 446, 455, 197 A.2d 140, 145 (1964).
We affirm the awards for loss of use and enjoyment as to Ms. Gumina and Leslie and Timothy Tripp. The fair market value of Ms. Gumina's unimpaired property was, as determined by Appellees' expert, $370,000. Ms. Gumina testified that, because her water made her skin itchy and had an odor that burned her nostrils, she showered at an alternate location, avoided consumption of her well water, and changed her gardening habits. Additionally, she testified that she could no longer maintain koi fish in her pond, and that her cooking pots and bathtub began to stain. Ms. Gumina received, for her approximately fourteen months' residency, $250,000 in compensatory damages for loss of use and enjoyment.
Similarly, Appellees' expert determined that the unimpaired value of the Tripps' property was $730,000. Mr. and Mrs. Tripp testified that, as a result of the gasoline leak, they used bottled water, stopped using their Jacuzzi and pool, stopped doing yardwork, showered outside for a time, and suffered from noise and odors relating to remediation activities. Mr. and Mrs. Tripp each recovered $350,000 in damages for loss of use and enjoyment, thus totaling $700,000 — $30,000 less than the unimpaired value of their home. Although Ms. Gumina and the Tripps' compensatory damage awards approach very nearly the unimpaired market value of their respective properties, they do not violate the standards discussed above. Thus, while acknowledging that Ms. Gumina and the Tripps resided in the contaminated properties for only limited amounts of time, we do not think the awards are unsupported by the evidence, nor do they shock this Court's conscience. Thus, we decline to substitute our judgment for that of the jury.
As to Ms. Ho, Exxon challenges the facial excessiveness of the award for loss of use and enjoyment, although it admitted liability. Ms. Ho operates a nail and hair salon in a property located directly
We determine that, in light of the evidence provided at trial, the $1.6 million loss of use and enjoyment award to Ms. Ho was too speculative and thus, denial of the request for a new trial as to Ms. Ho's claim was an abuse of discretion. As noted above, awards for loss of use and enjoyment may not exceed the unimpaired market value of the property at issue. Without evidence of the pre-leak, unimpaired market value of the ongoing business of the salon operated by Ms. Ho, we cannot determine appropriately whether the jury's award was premised on a rational basis. Although we are sympathetic to the inconveniences suffered by Ms. Ho, an award of $1.6 million was not justified properly, based on the evidence of a discomfort, annoyance, and a $3,000-$4,000 per year loss in business. We therefore reverse her verdict and direct remand of her claim for a new trial.
Exxon contends that the trial court admitted impermissibly the testimony of Dr. John Kilpatrick, Appellees' real property valuation expert witness. "[T]he admissibility of expert testimony is a matter largely within the discretion of the trial court and its action will seldom constitute ground for reversal." Radman v. Harold, 279 Md. 167, 173, 367 A.2d 472, 476 (1977). Thus, the admissibility of expert opinion "is within the sound discretion of the trial judge and will not be disturbed on appeal unless clearly erroneous." Blackwell v. Wyeth, 408 Md. 575, 618, 971 A.2d 235, 261 (2009) (quoting Wilson v. State, 370 Md. 191, 200, 803 A.2d 1034, 1039 (2002)); see also Radman, 279 Md. at 173, 367 A.2d at 476 ("[I]t is well settled ... that the trial court's determination [regarding expert qualification] ... may be reversed if it is founded on an error of law or some serious mistake, or if the trial court clearly abused its discretion."). Therefore, we must determine whether the trial court abused its discretion in admitting the expert testimony of Dr. Kilpatrick.
As the Court of Special Appeals noted in Giant Food, Inc. v. Booker, "simply because a witness has been tendered and qualified as an expert in a particular occupation or profession, it does not follow that the expert may render an unbridled opinion, which does not otherwise comport with Md. Rule 5-702." 152 Md.App. 166, 182-83, 831 A.2d 481, 490 (2003). Rather, an expert's opinion must be grounded in sufficient facts, such that it constitutes more than mere speculation or conjecture, and reflect the use of "reliable principles and methodology in support of the expert's conclusions." Id.; see also CSX Transp., Inc., 159 Md.App. at 189, 858 A.2d at 1063 (noting that the third factor of Maryland Rule 5-702 encompasses the two sub-issues of sufficient factual basis and reliable methodology). Here, Exxon challenges the trial court's admission of Dr. Kilpatrick's expert testimony under only the third requirement, contending that (1) the methodology underlying his estimates as to diminution in value is unreliable (as reflected in Exxon's Frye-Reed challenge); and (2) the testimony lacked a sufficient factual basis because Dr. Kilpatrick failed to take into account actual comparable real estate sales in the area following the leak.
Appraisals of fair market value are the most common method of establishing the value of real property. Comparable sales are often utilized in determining fair market value, and "ha[ve] long been accepted in Maryland." Bern-Shaw Ltd. P'ship v. Mayor & City Council of Balt., 377 Md. 277, 289, 833 A.2d 502, 509 (2003) (citing Brinsfield v. City of Balt., 236 Md. 66, 202 A.2d 335 (1964)). While Maryland law does not compel 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. Here, there was ample actual market data from which a valuation opinion (baseline or otherwise) could have been made, had Dr. Kilpatrick chosen to use it. Any adjustments could have been explained and justified. Thus, to discard market data, Dr. Kilpatrick had to provide a reasonable justification explaining the unsuitability or unreliability of the comparable sales data in the Jacksonville area.
Dr. Kilpatrick did not discard the use of comparable sales data generally. In fact, he measured the value of plaintiffs' properties prior to the leak using actual transactional data. He opined, however, that the post-leak value of the properties at issue could not be calculated principally using comparable sales data because of the inherent unreliability of the comparable sales data in the post-leak Jacksonville community. In trying to establish this unreliability, Dr. Kilpatrick's report advanced a nuanced distinction between "market value" and "market price." Specifically, Dr. Kilpatrick stated that market value represents the true value of the property where the buyer and seller possess perfect and utterly complete information. Market price, by contrast, does not necessarily reflect perfect information. Because of the possibility that the buyer may be uninformed, Dr. Kilpatrick asserts that the market price of real estate reflects an artificial inflation over the market value. Here, Dr. Kilpatrick determined that the transactional data could not be relied upon because the sales in Jacksonville represented the market price, rather than the market value, stating that "disclosure of the ExxonMobil spill, and the risks
Dr. Kilpatrick based his assessment of unreliability on informal interviews and surveys of real estate agents. These interviews, however, belie Dr. Kilpatrick's assertions. The surveyed real estate agents noted the difficulties in closing sales in the Jacksonville real estate market subsequent to announcement of the leak. Specifically, these agents noted that some buyers stayed away from the area surrounding the spill, with buyers refusing to "even look at the house because of the spill," or "look and then decide it's just too much to deal with." Other agents noted that prices were reduced dramatically in order to complete a sale; that disclosure forms were given to prospective purchasers; and in most cases, water tests were performed prior to the sale of residential properties in the Jacksonville area. Additionally, surveys of real estate mortgage lenders suggested that some financial institutions would not even agree to finance the purchase of a property with actual groundwater contamination.
The statements of the real estate agents are relevant to the amount of diminution in value of properties in the Jacksonville area, but do not provide an acceptable or sufficient factual basis for Dr. Kilpatrick's conclusion that the sales that occurred were unreliable. An expert's opinion "is of no greater probative value than the soundness of his reasons given therefor will warrant." Surkovich v. Doub, 258 Md. 263, 272, 265 A.2d 447, 451 (1970). Not only do the interviews and surveys of real estate agents and the testimony of the homeowners contradict Dr. Kilpatrick's proffered justifications for ignoring comparable sales data, but the level of speculation attendant to that conclusion is, as the United States District Court for the Northern District of California noted in reviewing Dr. Kilpatrick's proposed testimony in another case, "serious[ly] concern[ing]." Palmisano v. Olin Corp., No. C-03-01607 RMW, 2005 WL 6777561, at *5 n. 5, 2005 U.S. Dist. LEXIS 48005, at *16 n. 5 (N.D.Cal. July 5, 2005). Dr. Kilpatrick testified that he does not know when, if ever, the "market price" will reflect the sixty percent diminution in "market value" that he concludes the properties suffered. As we have noted, however, fair market value is the highest and best price at which a prospective buyer and a prospective seller will agree for the sale of a given property. See Md.Code (1974, 2010 Repl.Vol.), Real Property Article § 12-105(b). Thus, even if we accepted, for the sake of argument, Dr. Kilpatrick's theory that prospective purchasers are ill-informed regarding the Jacksonville Exxon leak, the market prices represented by actual sales in the community still represent the highest and best price for the property — even if the buyers are paying, as Dr. Kilpatrick asserts, too much. Allowing the plaintiffs to recover damages for a hypothetical and speculative diminution in market value that may never materialize
Judge Souder denied Exxon's motions for partial summary judgment as to the following claims: medical monitoring, prospective loss of use and enjoyment, fraud, and liability for punitive damages based on allegations of evil motive, ill will, or intent to injure. Judge Souder required Appellees to elect between pursuit of damages for diminution in value of real property and prospective loss of use and enjoyment of their properties in an order dated 23 August 2010, and also ordered that Exxon's use of MTBE ("methyl tertiary-butyl ether," a chemical additive to vehicular motor fuel) in gasoline and its remediation efforts could not provide a basis for the fraud claims.
Further, Exxon argues, it was unclear throughout trial what were the specific bases and arguments in support of Appellees' fraud claims. For example, although Appellees characterized at times their fraud claims as a single overarching fraudulent scheme, and thus only one count of fraud, the special verdict sheets submitted to the jury appeared to contain reference to six separate incidents of fraud, but did not require the jury to allocate any compensatory or punitive awards among the various frauds (or other torts) alleged. Moreover, in closing arguments on 13 June 2011, counsel for Appellees stated that they had "established in this case six fraud claims by clear and convincing evidence."
In their petition for certiorari, Appellees framed the following questions for review:
In addition to these Appellees, the following Appellees did not present any testimony supporting remediation fraud by any owner or occupier of the relevant premises, but recovered verdicts and punitive damages for fraud nonetheless: Edgar Argo, through personal representative Marlene Argo (did not seek recovery for fraud); Dana Rhyne Dieter; Patricia Dieter; Alissa Dutrow; Daryl Dutrow; Emily Dutrow; Jennifer Dutrow; Anthony Frattarola; Marianne Frattarola; Victoria Frattarola; Eugene Freeman; Pearlie Freeman; Katherine King, through personal representative Paul King; Kathleen Oursler; Rodger Oursler; Bessie Over, through personal representative Nancy Lee Over Webster; Christy Shaw; Thomas Shaw; Amy Vuong; Krystal Vuong; Man A. Vuong; Shuzhen Wu (Vuong); Sinh Vuong; Stacy Vuong; Chen-Yu Yen (regarding remediation fraud due to false statements made by MDE); Ray-Whey Yen (regarding remediation fraud due to false statements made by MDE); Christopher Zaccari; Patricia Zaccari; Lenore Zaccari; Dogwood Management, LLC; Klein Family Development Corp.; Klein's of Jacksonville, Inc.; 14342 Jarrettsville Pike, LLC; 3313 Paper Mill Road, LLC; Jarrettsville Retail, LLC; 14231 Jarrettsville Pike, LLC; 14237 Jarrettsville Pike, LLC; and, 3422 Sweet Air Road, LLC.
We therefore reverse the verdicts for remediation fraud for these Appellees.
Id. at 713-14, 621 A.2d at 874.
Exxon contends, and presented evidence at trial supporting its assertion, that the contamination on the property owned by Anna and John Walega is not attributable to the Jacksonville Exxon leak, but rather to an improperly abandoned underground storage tank found nearby. The jury, however, determined otherwise. Because we view the evidence in the light most favorable to these Appellees, we will not disturb the jury's conclusion that the evidence was sufficient to determine that the contamination detected on the Walega property was attributable to the Jacksonville Exxon spill.
Similarly, the property leased by Van Ho (Elegant Nails & Hair) was contaminated already at the time of the Jacksonville Exxon leak due to a prior gasoline leak in 2004 at the Four Corners Amoco/BP station, and was already equipped with a carbon filtration system. The jury, however, determined apparently that the contamination detected in March of 2006 (after the POET system malfunctioned) was attributable to the Exxon leak.
In its brief, Exxon criticizes the testimony of Dr. Malik, noting that of the ninety-six plaintiffs for whom he performed a psychiatric evaluation, every plaintiff but one received a psychiatric diagnosis, despite Dr. Malik's conclusion that all of the plaintiffs seen were functioning normally. Additionally, Exxon claims that Dr. Malik erred in conducting clinical examinations, rather than forensic examinations, which take into account broader sources of information (rather than relying solely on the patient). Despite these criticisms, Exxon did not raise the admission of Dr. Malik's expert testimony as an issue on appeal on grounds of reliability or methodology. We therefore presume that Dr. Malik's testimony was admitted properly.
Exxon argues that this type of testimony, admitted as probative of the state of mind of an Appellee, should have been excluded by the trial court because the prejudicial impact of the testimony far outweighs its probative value. See Md. R. 5-403. Alternatively, Exxon contends that the trial court should have given an immediate limiting instruction to the jury, rather than waiting until the end of the trial. Because we review the trial judge's decision to admit such evidence under an abuse of discretion standard, reversal is appropriate only "where no reasonable person would share the view taken by the trial judge." Consol. Waste Indus., Inc. v. Std. Equip. Co., 421 Md. 210, 219, 26 A.3d 352, 357 (2011). Because we do not believe that "no reasonable person" would admit the testimony regarding Quinan's rash, we decline to disturb Judge Dugan's evidentiary ruling in the limited circumstances presented by the testimony relating to Quinan.
Because damages for permanent injury to real property are generally available only to the owners of real property, see Peters v. ContiGroup, 292 S.W.3d 380, 389 (Mo.Ct.App. 2009) (noting that, because "damages for a permanent nuisance involve the diminution in value of the property[,] ... one seeking damages for a permanent nuisance must have a property interest"); In re the Premcor Refining Grp., Inc., 233 S.W.3d 904, 908-09 (Tex. App.2007) (dismissing the claims of minor plaintiffs, adult next friends, and adult plaintiffs who were not "record owners of the real property at the time the initial injury [constituting a permanent nuisance] to the real property occurred"), awards for loss of use and enjoyment to children and non-owner occupiers of the land therefore are reversed.
Thus, the loss of use and enjoyment awards are reversed as to the following Appellees: Agniezska Hudzik (Allison); Eric Allison; Kristen Allison; Caitlin Andrews; Daniel Andrews; Ian Austin; Reid Austin; Emily Backus; Alex Blum; Madelyn Blum; Ashley Brookhart; Sean Brookhart; Victoria Brookhart; Tara Brown; John Wright (Bull/ Wright); Amanda Buscemi; Cari Cheelsman (Buscemi); Charles Cheelsman (Buscemi); Karen Buscemi; Mary Buscemi; Rachel Buscemi; Adriana Capizzi; Francesca Capizzi; Julia Capizzi; Maria Navarro-Cole; Dominique DiPino; Francesca DiPino; Gina DiPino; Joseph DiPino; Paul DiPino, III; Alissa Dutrow; Emily Dutrow; Sarah Dyer; Brian Easton; David Easton; Michael Easton; James Turfler (Eisgruber); Emily Federico; Grace Federico; Kevin Federico; Sarah Fletcher; Zachary Fletcher; Bruna Fonseca; Maira Fonseca; Tiago Fonseca; Gia Fontanazza; Anthony Frattarola; Marianne Frattarola; Victoria Frattarola; Alexandra Freas; James Freas; Eugene Freeman (individually); Pearlie Freeman (individually); Kevin Gillespie; Tara Gillespie; Thomas Gillespie, III; Gavin Grogan; Linda Hairston-Taulton; Allison Higgins; John Higgins; Patrick Higgins; Brendan Huey; Shannon Huey; Lauryn Kelly; Michele Kelly; Kathleen Kennedy; Calvin Kirkwood; Chase Kirkwood; Jeremy Kirkwood; Tyler Kirkwood; Mitchell Larrabee; William Larrabee; Kristen Lawrence; Jennifer Lazzaro; Susan Lazzaro; Kaitlyn Lindenmeyer; Megan Lindenmeyer; Christopher Makowy; Corey Makowy; Heather Makowy; Rebecca Makowy; Alexander Makris; Eleni Makris; Allie Mangione; Taylor Mangione; Ian Marsico; Kaitlin Marsico; Kelly McCleary; Leigh Morgan; R. Wade Morgan; Catherine Moss; Natalie Murphy; Payton Murphy; Gregory Naylor, Jr.; Kenneth Naylor; Tracy Naylor; Alexandra Nemer; Emmanuel Nemer; Shelby O'Brien; Emily Pagani; Nicholas Pagani; Andrew Palmer; Geoffrey Palmer; Andrew Parker; James Parker; Bradley Peters; John Peters; Andrew Podles; Claire Podles; John Podles; Thomas Podles, Jr.; Anna Popomaronis; Eleni Popomaronis; Peter Vailas (Popomaronis); Thomas Popomaronis; Casey Proefrock; John Proefrock; Kate Proefrock; Megan Proefrock; Brynn Puller; John Puller; Jennifer Riegger; KatieRose Riegger; Meghen Riegger; Mary Judith Rudell; Alexander Scheetz; Arden Scheetz; Marah Schmitz; Adam Seery; Meghan Seery; Allison Shields; Erin Shields; Kevin Shields; Chelsea Simanski; Garrett Simanski; Julia Simanski; Charlotte Slaughter; Diann Kohute (Slaughter); Emily Slaughter; Kaitlyn Jones (Slaughter); Nancy Slaughter; William Slaughter, Jr.; Alyssa Stehman; Jonathon Stehman; Marina Stehman; Sierra Stehman; Alicia Sullivan; Brendan Sullivan, Jr.; Amanda Sutor; Austin Sutor; Alexander Trader; Matthew Trader; Patrick Trader; Brian Tripp; Steven Tripp; Nicholas Tsakalos; Elliot Gloger (Vaughan); Kieran Vaughan; Francesca Viscuso; Gabrielle Viscuso; Nicole Viscuso; Chase Vosvick; Tanner Visvoci; Amy Vuong; Krystal Vuong; Shuzhen Vuong; Sinh Vuong; Jack Wachter; Ryan Wachter; Megan Welms; Delores Whitehurst; Gertrude McNicholas (Whitehurst); Cole Wilhelmsen; Hans Wilhelmsen III; Lindsey Williams; Owen Williams; and, Jennifer Winfield.
As explained below, Exxon admitted liability for some compensatory damages to Appellee Van Ho. Because Ms. Ho is a lessee, she did not claim, and is not entitled to recover, damages for diminution in value of the real property she leased. Because Exxon admitted liability to Ms. Ho, however, she may recover damages for loss of use and enjoyment as a lessee, and not an owner, of the real property at issue in this case. As explained below, we will reverse and direct remand for a new trial as to the loss of use and enjoyment award to Ms. Ho.
Of these Appellees, Exxon admitted liability for negligence, trespass, nuisance, and strict liability to the following: Allison, Stehman, Vuong, Welms, and 3422 Sweet Air Road, LLC. Because Exxon admitted liability to these Appellees, they are excluded from this discussion and may recover damages for diminution in value to real property, even though their properties never tested positive for contamination.
Here, Exxon attempts to impose the strictures of Frye-Reed on the expert testimony of a real estate appraiser. Valuation of real property, however, is not the type of scientific expert opinion contemplated by the Frye-Reed test. See id. Thus, even though the trial court conducted a Frye-Reed hearing prior to accepting Dr. Kilpatrick as an expert witness, we determine that Frye-Reed does not apply here.
Exxon challenges on appeal, however, Dr. Kilpatrick's valuation of Appellee Klein's of Jacksonville ("Klein's"), which operated a grocery store on property owned by Appellee Klein Family Development Corp. at 14330 Jarrettsville Pike, and recovered damages for injury to its business based on a "forced liquidation theory." Exxon did not object to the admission of Dr. Kilpatrick's testimony before the trial court, but argued at trial that Dr. Kilpatrick's testimony as to Klein's was speculative, not supported by a factual basis, and should not be permitted to go to the jury.
Klein's opened for business in the years immediately preceding the subject gasoline leak, and remained unprofitable at the time of the leak (as was expected by Klein's, according to Dr. Kilpatrick's testimony). Dr. Kilpatrick testified that the proper valuation of Klein's was its liquidation value, or what the store would be worth to a prospective purchaser. Dr. Kilpatrick's "impaired" valuation was based on what he termed a "disorderly liquidation," in which there is no prospective purchaser due to the undesirability of locating in the Jacksonville area. Under Dr. Kilpatrick's theory, therefore, Klein's would be forced to sell off its fixtures and furniture in piecemeal form to prospective purchasers from outside the Jacksonville area, thus incurring additional costs.
Exxon argues that this methodology was based on the unfounded assumption that Klein's of Jacksonville would go out of business regardless of the existence of the leak, an assumption not supported by testimony from any Klein's representative or other evidence produced at trial. To the contrary, Dr. Kilpatrick acknowledged that unprofitability in the store's first few years of operation was anticipated by Klein's, and that, following the leak, revenues had increased approximately fifty percent. Because Dr. Kilpatrick's fundamental assumption — that Klein's would be forced to liquidate due to negative impacts resulting from the spill — was unsupported by any evidence offered at trial, we conclude that his opinion lacked a sufficient factual basis. Thus, because Dr. Kilpatrick's testimony had no probative force as to the valuation of the business, and Klein's offered no additional evidence in support of its claim for damages, the trial judge erred in submitting the claim to the jury. See Giant Food, 152 Md.App. at 182, 831 A.2d at 490 ("No matter how highly qualified the expert may be in his field, his opinion has no probative force unless a sufficient factual basis to support a rational conclusion is shown." (quoting State Dep't of Health v. Walker, 238 Md. 512, 520, 209 A.2d 555, 559 (1965))). Therefore, we reverse the judgment for "loss of liquidation value" as to Klein's of Jacksonville.
