SIGNIFICANT CASE SUMMARY

Maryland Significant Case Summary

Donovan, et al. v. Stanley Steemer International, Inc., et al.
United States District Court for the District of Maryland
No. JKB-26-01329, 2026 LEXIS 206230 (D. Md. Sept. 10, 2026).

Decided: September 10, 2026

The Economic Loss Doctrine does not bar a plaintiff’s negligence claim against a contractor where the plaintiff alleges damages outside the scope of the contracted work.

Background

Plaintiffs owned a Baltimore County property that sustained accidental water damage. Plaintiffs hired Defendant, Stanley Steemer International, Inc., to mitigate that water damage. According to Plaintiffs, the Defendant failed to follow industry-standard protocol in performing the mitigation work, leading to mold growth in various areas of the property. Plaintiffs then hired Madison Taylor, Inc. to remediate the mold. After Madison Taylor completed its work, Plaintiffs hired a third-party inspector, who allegedly found that mold remained on the property and had cross-contaminated and spread to additional areas.

Plaintiffs filed a Complaint against Stanley Steemer and Madison Taylor. As to their claims against Madison Taylor, Plaintiffs alleged it was negligent in performing its mold remediation work, which caused the mold to spread to other parts of the property. Plaintiffs alleged that Madison Taylor’s actions led to adverse health effects and additional property damage to clothing and furnishings within the property. Defendant Madison Taylor filed a Motion to Dismiss the negligence claim, relying on the Economic Loss Doctrine, which, outside some exceptional circumstances, prevents a plaintiff from bringing suit for negligence while alleging solely economic damages.

Holding

The Court denied Madison Taylor’s Motion to Dismiss, citing Maryland case law that the Economic Loss Doctrine does not apply where a plaintiff alleges damages to “some person or tangible thing” outside of the product or service purchased. As the Court put it, the Economic Loss Doctrine “prevents a plaintiff from using tort to recover the unreceived benefit of a bargain, but it does not prevent a plaintiff from using tort to recover damages to other property or people resulting from a defendant’s negligence.” The Court held that the Economic Loss Doctrine did not bar Plaintiff’s Negligence claim against Madison Taylor because it alleged (1) personal injury from exposure to airborne mold spores and (2) damage to furnishings, clothing, and other belongings that were not within the scope of the mold remediation work. Accordingly, the Court denied the Motion to Dismiss.

Questions about this case can be directed to Ethan Brown at (443) 641-0567 or ebrown@tthlaw.com.