$100,000 more per family for MTBE

The Baltimore Sun

A Montgomery County jury awarded four Harford County families approximately $100,000 each in punitive damages yesterday after finding a national homebuilding company had not disclosed that wells on their property were contaminated.

The amount awarded by the jury was significantly less than the $5 million the Fallston families' attorneys had requested for each client.

The families sued D.R. Horton, a Texas-based Fortune 500 company, for fraud, misrepresentation of facts, deceptive trade practices and breach of warranty.

D.R. Horton was aware of the water contamination on the Fallston property from environmental reports but did not disclose that information before selling the homes in a subdivision known as DelMar Farms, said the plaintiffs' attorneys.

Ted M. Flerlage, one of the plaintiffs' attorneys from Peter Angelos' law firm, told jurors yesterday that D.R. Horton's "conduct amounts to fraud. There should be some accountability here."

An environmental evaluation conducted before the homes were sold showed that five wells had traces of methyltertiary butyl ether -- a gasoline additive known as MTBE -- along with xylene and diesel fuel, according to the plaintiffs' attorneys. MTBE has been known to cause cancer in lab animals, although its health effects in low levels is unknown.

The report indicated the levels of MTBE were at 15.5 parts per billion. The Maryland Department of the Environment recommends more testing if the MTBE contamination level is over 10 parts per billion and treatment for wells that have 20 parts per billion and above.

D.R. Horton installed carbon filtration systems in the homes, which are used to remove contamination, but did not tell the new owners, the plaintiffs' attorneys said.

"There was knowledge of the risk in the groundwater, and D.R. Horton elected not to disclose that fact," Flerlage said.

The plaintiffs' attorneys said yesterday that D.R. Horton is ranked 155th in the Fortune 500 companies, with a gross revenue of $15.1 billion and profits of $1.2 billion last year.

Mary McNamara-Koch, another of the plaintiffs' attorneys, told the jury that each of the eight clients should get $5 million to send a message that "when people invest their money, they should have all the information and no one can fraudulently withhold information."

But defense attorney Donald A. Cockrill said the jury had sent a serious message to the company after the three-week civil trial.

"D.R. Horton has learned a valuable lesson." Cockrill said in court. "Fraud is serious business for a publicly traded company."

He added, "No one was hurt. The damages are economic, not physical. Everyone got rewarded for the decreased value of their home."

The punitive damages, which were approximately $100,000 for each family, are in addition to the compensatory damages awarded by the jury Monday. Those damages ranged between $140,000 to $192,000 for each family.

"It's a disappointment," Dan Beauchemin, one of the plaintiffs, said yesterday. "That's not a deterrent. That's a cup of coffee for D.R. Horton."

Cockrill declined to comment after the jury announced the punitive awards.

In 2004, state authorities linked the source of the water contamination to a Fallston gas station.

That prompted a class-action lawsuit against Exxon Mobil Oil Corp. and the local station owner, John R. Hicks. That suit, filed in Harford County Circuit Court four years ago, is still pending.

madison.park@baltsun.com

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