E-Alert Case Updates
Owner of Gas Station’s Suit Against Exxon Time-Barred Due to Inquiry Notice
Storto Enterprises, Inc. v. ExxonMobil Oil Corporation, et al.
In this recently issued Memorandum Opinion from the United States District Court for the District of Maryland, Judge William D. Quarles, Jr. granted the Defendant’s Motion for Summary Judgment based on the statute of limitations.
The Plaintiff in the case, Storto Enterprises, Inc. (“Storto”) owned and operated an Exxon gas station in Phoenix, Maryland. ExxonMobil Corporation (“Exxon”) installed an EECO 3000 electronic line leak detector at the station sometime prior to 2006. Apparently, the EECO 3000 system often malfunctioned, and in February 2006 it was discovered that 26,000 gallons of gasoline leaked from one of the station’s underground tanks since January 2006. On the same day, Exxon informed the station that they would be replacing the EECO with a newer more reliable leak detection system.
On May 22, 2006, Storto and Exxon were both sued as Defendants based on the leak by Plaintiffs Jeff and Marsha Alban. The Albans alleged that Exxon and Storto knew and fraudulently concealed the EECO 3000’s problems with preventing and identifying leaks.
On June 12, 2009, Storto and Exxon entered a tolling agreement that would toll any applicable statute of limitations for one year. Any claims that were time barred as of June 12, 2009 would remain time-barred. Storto filed suit against Exxon on May 19, 2010 in the Circuit Court of Maryland for Baltimore City including a claim of fraudulent concealment of the problems associated with the EECO 3000.
Exxon removed the action to the U.S. District Court for the District of Maryland and filed a successful Motion to Dismiss all claims, but the fraudulent concealment count. Thereafter, Exxon moved for summary judgment on the fraudulent concealment count based on Maryland’s three (3) year statute of limitations. Storto countered the Exxon motion by arguing that the limitations period did not begin to run until February 2008 when it learned that Exxon had knowingly concealed the EECO 3000’s systematic defectiveness.
The Court agreed with Exxon. Judge Quarles pointed out that Maryland law recognizes that the limitations period begins to run when the plaintiff knew, or reasonably should have known of the wrong. Am. Gen. Assur. Co. v. Pappano, 374 Md. 339, 351, 822 A.2d 1212, 1219 (2003). Further, a person need not know all the details of his cause of action, but rather only have “actual knowledge of facts sufficient to put an ordinarily prudent person on inquiry.” DeGroft v. Lancaster Silo Co., 527 A.2d 1316, 1324 (Md. Ct. Spec. App. 1987).
The Court found that there was no question that Storto was on inquiry notice by at least May 22, 2006 when it knew Exxon was planning to replace the EECO 3000, knew that the system frequently required repairs, knew that it was not functioning properly in January/February 2006, and knew (by virtue of the Albans’ lawsuit) that Exxon had been accused of fraudulently concealing problems with the EECO 3000. As such, the Court determined that by May 22, 2009, an ordinarily prudent person with the information of Storto would have performed a reasonable investigation into potential claims against Exxon.
As such, any such claim by Storto needed to have been filed by May 22, 2009, prior to the enactment of the one year tolling agreement, and hence Storto’s claim filed on May 19, 2010 was time-barred, and Exxon was entitled to summary judgment.
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