Lloyd v. General Motors (Ct. of Appeals)

Issued February 8, 2007 -- Opinion by Chief Judge Robert M. Bell -- Concurring Opinion by Judge John C. Eldridge

From the Court's headnote beginning its lengthy opinion:

Even in the absence of actual personal injury, economic loss, the cost to fix the defect alleged, is recoverable where it is also alleged that such defect has caused, in other cases, serious bodily injury and, thus, constitutes an unreasonable risk of death or serious injury.

Petitioners Mr. and Mrs. Lloyd ("Lloyd") were the representative plaintiffs for a class action on behalf of designated purchasers of vehicles with certain types of front seats installed. They sought to recover from the respondents the cost of repairing and/or replacing the front seats in each class vehicle. Lloyd alleged that the seats were unsafe because they would allegedly collapse rearward in moderate and severe rear-impact collisions. None of the petitioners or any putative class members alleged that he or she had experienced personal injury as a result of the mechanical failure that caused the alleged defect.

In its Amended Complaint, Petitioners alleged seven causes of action:

1. negligence
2. strict liability
3. implied warranty of merchantability
4. "negligent failure to disclose, failure to warn, concealment and misrepresentation" ("negligent misrepresentation")
5. fraudulent concealment and intentional failure to warn
6. unfair or deceptive trade practices
7. civil conspiracy

The core issue examined by the court in responding to the Respondent's Motion for Dismiss for failure to state a claim was whether the risk of harm that has not yet occurred was sufficient to sustain a legal claim for each of the counts in the Amended Complaint, in particular those in tort. After a review of Maryland precedent, the Court of Appeals held that the facts alleged, if proven at trial, would satisfy each of the severity and probability "prongs" of the test for economic loss recovery in tort from Morris v. Osmose, 340 Md. 519, 533:

"Thus, if the possible injury is extraordinarily severe, i.e., multiple deaths, we do not require the probability of the injury occurring to be as high as we would require if the injury threatened were less severe, i.e. a broken leg or damage to property. Likewise, if the probability of the injury occurring is extraordinarily high, we do not require the injury to be as severe as we would if the probability of the injury were lower."

This precedent, driven by policy concern balancing a skeptical eye toward mere speculative damages against the policy of averting harms either reasonably foreseeable or severe, led the Court to uphold in turn each of the seven counts in Lloyd's Amended Complaint.

In his concurring opinion, Judge Eldridge noted his agreement with the holding and reasoning of the Court's opinion, but maintained his agreement today with his support of the dissenting opinion in the Morris case and one other precedent cited in the opinion, in which cases Judge Eldridge had previously dissented as an active member of the Court.

The full texts of both the opinion of the Court and Judge Eldridge's concurring opinion are available here in PDF.