Circuit Court for Baltimore County Case # 03-C-07-003809
The opinion of the court was delivered by: Harrell, J.
Exxon Mobil Corporation v. Albright, et al.,
No. 15, September Term 2012.
TORTS - FRAUD - DETRIMENTAL RELIANCE REQUIRED
Although a plaintiff may recover for fraud where the allegedly fraudulent statement was not made directly to the plaintiff, recovery is not permitted without a demonstration that the plaintiff relied, either directly or indirectly, on the relevant misrepresentation to his or her detriment. Maryland law does not permit a third party to recover damages for fraud purely on the basis of a false statement made to a governmental entity. Thus, where a plaintiff does not prove reliance on a personal basis or does not establish detriment arising from his or her reliance, he or she may not recover damages for fraud.
TORTS - DAMAGES - EMOTIONAL DISTRESS FOR FEAR OF DEVELOPING DISEASE
To recover emotional distress damages for fear of developing disease, a plaintiff must show that (1) he or she was exposed actually to a toxic substance due to the defendant's tortious conduct; (2) which led him or her to fear objectively and reasonably that he or she would contract a disease; and, (3) as a result of the objective and reasonable fear, he or she manifested a physical injury capable of objective determination.
TORTS - DAMAGES - MEDICAL MONITORING
A plaintiff may recover damages for medical monitoring costs, usually through the administration of an equitable fund, upon a showing of the following; (1) that the plaintiff was significantly exposed to a proven hazardous substance through the defendant's tortious conduct; (2) that as a proximate result of significant exposure, the plaintiff suffers a significantly increased risk of contracting a latent disease; (3) that increased risk makes periodic diagnostic medical examinations reasonably necessary; and, (4) that monitoring and testing procedures exist which make the early detection and treatment of the disease possible and beneficial.
TORTS - DAMAGES - EMOTIONAL DISTRESS FOR FEAR OF INJURY TO REAL PROPERTY
A plaintiff may ordinarily recover emotional distress damages attendant to injury to real property only in the presence of fraud, malice, or like motives.
DAMAGES - INJURY TO REAL PROPERTY - DUPLICATIVE COMPENSATION PROHIBITED
Owners of real property are not precluded necessarily from recovering both permanent diminution in value and loss of use and enjoyment damages, provided that the injuries for which recovery is sought do not overlap, so as to result in duplicative compensation. Where an alleged loss of use and enjoyment is "not distinguishable from" and "subsumed in" a claim for diminution in value, the impaired market value of the real property presumably reflects the injury, and a plaintiff may not recover damages for both loss of use and enjoyment and diminution in value.
TORTS - INJURY TO REAL PROPERTY - NO PHYSICAL IMPACT TO LAND
In the absence of physical injury to real property resulting from a defendant's tortious actions, a plaintiff must demonstrate more than modest adjustments in his or her use of his or her real property in order to recover damages. Thus, a plaintiff who has not provided present proof of contamination must show more than a possibility of future contamination or mere annoyance in order to recover. Absent a substantial interference with a plaintiff's use and enjoyment of his or her land, any diminution in value suffered by a plaintiff is not compensable.
DAMAGES - INJURY TO REAL PROPERTY - LOSS OF USE AND ENJOYMENT
An award for compensatory damages must be anchored to a rational basis on which to ensure that the awards are not merely speculative. In the context of damages for loss of use and enjoyment of real property, we determine that loss of use and enjoyment of real property cannot exceed the fair market, unimpaired value of the property at issue.
EXPERT TESTIMONY - VALUATION OF REAL PROPERTY
Expert testimony is required ordinarily to establish diminution in property value resulting from environmental contamination. Although Maryland law does not require the use of comparable sales data, to the exclusion of all other methodologies, a real estate appraisal expert must proffer a reasonable justification for ignoring market data where it is available.
Bell, C.J. Harrell Battaglia Greene Barbera McDonald Eldridge, John C. (Retired, Specially Assigned), JJ.
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.*fn1 The seemingly cursed Jacksonville community, the unfortunate site of multiple gasoline leaks over the years, see, e.g., Exxon Corp. v. Yarema, 69 Md. App. 124, 516 A.2d 990 (1987) (noting that in the early 1980s, three gasoline stations located along Jarrettsville Pike in Jacksonville experienced underground gasoline tank leaks), is reliant largely on private wells, rather than municipal supply sources, for its potable water. Thus, following the 2006 release into the underground aquifer serving certain of those wells, 466 residents and business proprietors of Jacksonville (hereinafter referred to collectively as "Appellees") filed the present suit against Exxon for asserted damages stemming from the contamination of their water supply, other consequential effects, and alleged misrepresentations by Exxon. The result was a jury award of $496,210,570 in compensatory damages and $1,045,550,000 in punitive damages for Appellees. Exxon appealed both the compensatory and the punitive damages awards as to all recovering plaintiffs, which were based on claims sounding in fraud, emotional distress for fear of contracting cancer, medical monitoring, emotional distress for fear of loss of property value, diminution in value of real property, and loss of use and enjoyment of real property.
FACTS AND PROCEDURAL HISTORY
Exxon purchased the property located at 14258 Jarrettsville Pike in Phoenix, 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.
During the construction process, Exxon elected to depart from the containment design plans described by Anderson.*fn2 Rather than installing the tank field liner and single-walled tanks, Exxon installed instead newly-available, double-walled, fiberglass Buffhide tanks, fabric-lined product lines, and a plastic overliner. The Jacksonville Exxon station opened for business on or about 1 November 1984. The station was retrofitted with additional protective features in 1992, made in response to enactment of amendments in 1990 to the federal Clean Air Act.*fn3 Evidence was submitted at trial suggesting that, during the retrofitting construction, the plastic overliner containment system was destroyed and was not repaired subsequently. Nevertheless, the Jacksonville Exxon station was operated for its owner by Storto Enterprises, Inc. without a harmful incident for over twenty years.*fn4
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.*fn5 This hole, approximately 3/16 inch in diameter, was detected duly by an electronic leak detection system,*fn6 which signaled an alarm inside the station and at the central monitoring service, Gilbarco Veeder-Root,*fn7 indicating a catastrophic line failure.*fn8 The leak detection system shut down automatically the regular unleaded gasoline product line. Contractors from Alger Electric, Inc. ("Alger") were sent to the Jacksonville Exxon station to investigate the cause of the alarm. They concluded (incorrectly) that no actual leak existed. Rather, the technicians concluded that the alarm resulted from a problem with a submersible pump motor. After replacing the motor, the Alger technicians recalibrated the leak detection system (incorrectly), such that the alarm system could no longer detect the actual leak when the fuel system was reactivated.
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. Loeiro 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, Loeiro 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."*fn9 Following a manual precision line test, which the regular gasoline line failed on February 17, Exxon reported the gasoline release to the Maryland
Department of the Environment ("MDE"), informing it of both the leak and the lost product amount. By then, over 26,000 gallons of gasoline were released into the underground environment by the Jacksonville Exxon station.
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."*fn10 Baltimore County notified individuals residing or operating businesses within a half-mile radius of the station of the leak. The MDE maintained a website on which it posted information regarding the remediation efforts and all well test results. Some residents outside of the area predicted initially to be contaminated, however, ultimately suffered water contamination.
The MDE is responsible for supervising Exxon's remediation efforts, pursuant to a Consent Decree entered in September 2008.*fn11 The MDE will determine when Exxon has completed its remediation obligations under the Consent Decree. During the remediation process, the MDE directed Exxon's investigation of the severity and scope of the leak, as well as in drilling and sampling monitoring and recovery wells. Exxon also submitted weekly site status reports to the MDE. Exxon has installed over 225 monitoring and recovery wells in the Jacksonville area, and, as of the time of trial, spent over $46 million on remediation.
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*fn12 where it and the MDE deemed necessary. Exxon also delivered voluntarily, for a limited period of time, bottled water to those residents whose wells were being ordered tested by the MDE.
Appellees filed suit initially in the Circuit Court for Baltimore County on 5 April 2007*fn13 against a number of defendants*fn14 for negligence, strict liability for an abnormally dangerous activity, private nuisance, trespass to land, and fraudulent concealment. Appellees sought compensatory damages for diminution in value and loss of use and enjoyment of real property, emotional distress for fear of loss of property value, medical monitoring, emotional distress for fear of contracting cancer, and punitive damages. Understandably, the case endured a lengthy procedural travail. Appellees filed a total of nine complaints, with the ultimate Eighth Amended Complaint filed on 12 March 2010.*fn15 Prior to trial, Exxon filed multiple motions for summary judgment,*fn16 but ultimately, nearly all of Appellees' claims for damages were permitted to be tried.*fn17
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:*fn18 (1) Anderson's 1983 testimony before the Board of Appeals (construction fraud);*fn19 (2) failure to inform the MDE that the 1992 retrofitting of the station, pursuant to the Clean Air Act, would involve destruction of the overliner (1992 permit fraud); (3) the posting of a misleading sign outside of the Jacksonville Exxon following the discovery of the leak (sign fraud); (4) a 2001 statement by Exxon to the MDE representing that the underground piping at the Jacksonville Exxon was double-walled piping, when actually it was single-walled piping (2001 double-walled piping fraud);*fn20 (5) inaccuracies in remediation reports regarding the quantity of leaked product recovered and the alleged flow of the leak (remediation fraud); and (6) deception of the MDE during the remediation process.*fn21
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,*fn22 a known human carcinogen, and methyl tertiary-butyl ether ("MTBE"),*fn23 a metabolite of which is formaldehyde.*fn24 Although not classified as known human carcinogens, MTBE and formaldehyde are known to have mutagenic properties.*fn25 Monitoring performed by Exxon in accordance with the MDE's requirements revealed benzene contamination in only ten wells.*fn26 Because few potable wells contained detectable concentrations of benzene, and therefore few Appellees could support their claims for fear of contracting cancer or a need for medical monitoring on the basis of benzene exposure, Appellees' primary contention at trial was that any MTBE contamination detected in any Appellee's well was sufficient to support that Appellee's fear of cancer and medical monitoring claims. Specifically, Appellees contended, through their expert witnesses, that there is "no safe level" of MTBE, and that any exposure to MTBE increases an individual's risk of cancer and is therefore sufficient to support a claim for fear of contracting cancer and medical monitoring. Of
Appellees' potable wells, only eight recorded detections of MTBE above the MDE action level of twenty parts per billion ("ppb") for MTBE in drinking water.*fn27 On Appellees' claims for emotional distress for fear of contracting cancer and medical monitoring, the trial court instructed the jury as follows:
To recover for fear of disease, a Plaintiff need not offer definitive proof of actual exposure to the disease-causing agent where such proof is unavailable; it is sufficient in such a situation if the Plaintiff proves that the Defendant created circumstances making the Plaintiff's exposure a reasonable probability. The evidence is sufficient to establish a reasonable probability if it produces in your minds a belief that an outcome is more likely true than not true.
A Plaintiff's entitlement to damages for fear of disease must be confined to injury suffered during the Plaintiff's legitimate window of mental anxiety. The window of anxiety begins when the Plaintiff first learns of the potential exposure to [sic] diseasecausing agent and ends when satisfactory information becomes available that puts to rest the fear of disease.
Furthermore, a Plaintiff must show that all claimed emotional distresses are objectively ascertainable through evidence of physical manifestations. Physical manifestations of emotional distress may include, but are not limited to, any of the following: Depression, inability to work or perform routine household chores, loss of appetite, insomnia, nightmares, loss of weight, extreme nervousness and irritability.
The Plaintiffs seek a form of relief called medical monitoring. Medical monitoring is a form of relief that represents the cost of periodic medical tests or examinations, to a reasonable degree of medical certainty, that are necessary to monitor a Plaintiff's health and to facilitate early diagnosis and treatment of a disease caused by exposure to a chemical. To qualify for medical monitoring damages, a Plaintiff must prove by a preponderance of the evidence: Relative to the general population, the Plaintiff has been exposed to MTBE, benzene, toluene, or other gasoline constituents; MTBE, benzene, or toluene are disease-causing agents; the exposure was caused by the 2006 Jacksonville Exxon release of gasoline into the environment; the exposure created a significant increase of risk for contracting a serious disease when compared to the general nonexposed population; diagnostic or early detection tests exist for this increased risk of a serious disease and is reasonably beneficial in the treatment of serious disease; this testing would be prescribed by a qualified physician in accordance with contemporary scientific principles and would not be prescribed to the general population absent this exposure.
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*fn28 as a remedy for their claims of nuisance, trespass, negligence, and strict liability for an abnormally dangerous activity.*fn29 Some Appellees sought additional recovery for emotional distress for fear of loss of property value. Appellees testified that they were reluctant to use portions of their properties, needed to purchase bottled drinking water, and were disturbed generally by the lights, noise, and smells produced by remediation activities, which reduced their enjoyment of their properties. Further, in support of their diminution in value allegations, Appellees introduced Dr. John Kilpatrick as an expert witness, who testified that each of the residential Appellees' properties had sustained a sixty percent diminution in value as of the day the leak was discovered.*fn30 Exxon countered with its expert witness, Richard Roddewig, who testified that, based on post-leak sales in the Jacksonville community, some properties had not sustained any diminution in value, while others sustained diminution up to 35% of their pre-leak value. 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.*fn31 The jury returned verdicts for 466 plaintiffs on all causes of action on 28 June 2011, amounting to a total compensatory damages award of $496,210,570. Following presentation of evidence on the issue of punitive damages, the jury returned an award for punitive damages totaling $1,045,550,000.
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.*fn32 Before the intermediate appellate court could decide the appeal, Appellees filed a petition for writ of certiorari in this Court on 24 February 2012. Exxon opposed Appellees' petition, arguing that it was better for the case to proceed first through the Court of Special Appeals. We granted Appellees' petition for certiorari on 9 May 2012, 426 Md. 427, 44 A.3d 421 (2012), to consider the following issues,*fn33 rephrased and consolidated for brevity:*fn34
(1) Does Maryland recognize third party reliance in a fraud action?
(2) Was there sufficient evidence to support the jury's fraud awards?
(3) Where a Plaintiff alleges multiple instances of fraud, must the jury verdict sheet allocate compensatory damages among the various instances of fraud?
(4) Was the punitive damages award excessive?
(5) Was there sufficient evidence to support the jury's award of emotional distress damages for fear of cancer?
(6) Does Maryland recognize a claim for medical monitoring?
(7) Were the jury's property damages duplicative, excessive, and speculative?
(8) Is the release of a contaminant into an aquifer sufficient to establish trespass to land regardless of the level of detected contamination in an individual Plaintiff's well?
I. Sufficiency of Evidence for Fraud Verdict and Punitive Damages
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, 17 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. Therefore, we reverse the judgment as to fraud.
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 at 791-92 (declining to sustain a cause of action for fraud to a third party in part because the third party was not a party to the alleged misrepresentation).
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 February 22, 2013not enough, however.*fn35 Appellees, like Wells Fargo in Diamond Point, must also have relied personally, either directly or indirectly, on the allegedly false representations. Here, however, Appellees do not provide any evidence that they relied personally on Exxon's allegedly fraudulent statements,*fn36 nor do they provide any persuasive legal authority sufficient to support their contention that proof of reliance is excused. Cf. Philip Morris, Inc. v. Angeletti, 358 Md. 689, 752 n.29, 752 A.2d 200, 234 n.29 (2000) (denying class certification for a claim of fraud in part because reliance on a misrepresentation by a plaintiff, on an individual basis, is essential to a civil claim of fraud). Maryland law does not permit a third party to recover damages for fraud purely on the basis of a false statement made to a governmental entity.
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.
B. Sign Fraud and Remediation Fraud
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 that their continued consumption of potentially contaminated water resulted from the sign's inaccuracy. Thus, even though 186 Appellees saw the sign, very few demonstrated reliance.*fn37
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,*fn38 we conclude that the Appellees' claims for remediation fraud suffer from various deficiencies of proof.
Specifically, some Appellees never established that the source of their impressions related to the remediation efforts was a representation made by Exxon Mobil,*fn39 nor that any statement allegedly relied upon was false,*fn40 let alone intentionally so. Others relied on opinions or predictions regarding where the contamination would flow in the aquifer to form the basis for their fraud claims,*fn41 which is an insufficient basis for fraud. See, e.g., Babb v. Bolyard, 194 Md. 603, 609, 72 A.2d 13, 16 (1950) (noting that, to form the basis for fraud, the statement "must be a statement of an alleged existing fact or facts, and not merely of some future or contingent event, or an expression of opinion as to the subject of the statement" (quoting Boulden v. Stilwell, 100 Md. 543, 551, 60 A. 609, 610 (1905))). Most claims, however, suffered in particular from an insufficient showing of detrimental reliance.
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*fn42 - for example, few changed (or did not change, as applicable) their water consumption habits in response to the assumedly false statements or in response to their discovery of the assumed falsity of the gasoline recovery estimates. Moreover, many Appellees disclaimed expressly reliance on Exxon's statements, testifying that they knew immediately of the gasoline release or thought Exxon was understating the severity of the leak.*fn43 Additionally, many of the Appellees who recovered for remediation fraud never experienced a positive well test for contamination, thereby undercutting conclusively any contention that false representations regarding recovery estimates, predicted migration of contaminants, necessity for bottled water, safety of MTBE, and locations of monitoring wells caused any harm.*fn44 Further, most Appellees offered no evidence that their period of alleged reliance on Exxon's representations caused any damage,*fn45 and some did not switch to bottled water after discovering contamination in their water supply.*fn46 Bare contamination of a well or brief consumption of water containing contaminants at or below the MDE and EPA action levels is not, without more, sufficient to support detrimental reliance.
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.
II. Emotional Distress Damages for Fear of Contracting Cancer
Exxon argues primarily that, because Appellees established neither the existence of present disease nor that they were more likely than not to contract cancer as a result of the 2006 Jacksonville Exxon leak, it was entitled to judgment as a matter of law on Appellees' emotional distress claims premised on fear of contracting cancer. In the alternative, Exxon contends that, because recovery for fear of cancer requires a showing of past or present exposure and objective, reasonable fear, the instructions submitted to the jury were erroneous, entitling it to a new trial. Lastly, Exxon argues that the trial court committed reversible error by permitting Appellees to testify regarding their opinions that they, members of their families, or their pets contracted various disorders as a result of the gasoline leak, in the absence of expert testimony sufficient to demonstrate causation. Thus, there are three central issues for our consideration: (1) whether Maryland permits recovery for emotional distress due to fear of contracting cancer; (2) if such recovery is permitted, what are the elements required to be established to permit recovery; and (3) whether the evidence in this record, viewed in a light most favorable to Appellees, is legally sufficient to justify recovery of emotional distress damages due to fear of contracting cancer.
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, ...