DeArmitt v. New York Life Insurance
73 A.3d 578
Pa. Super. Ct.2013Background
- Appellants sold a motel/motor home park in 1985; buyers’ mortgage payoff was to span 20 years starting 1986.
- In 1988, Appellants invested $50,000 with NYLIC agent Bicker seeking an annuity-like product for retirement income, not life insurance.
- Bicker provided an illustration showing growth to $153,000 in 18 years and asserted an annuity-like product would allow annual withdrawals; he stated such products typically include a small life-insurance component.
- In 1993, Appellants noticed a shortfall; Bicker reassured that the product would meet projected cash values.
- In 1995, Appellants learned the product was actually a whole life policy, triggering suit alleging fraud and UTPCPL claims; the case proceeded through the trial court with partial summary judgment against appellants in 2008 and 2010, followed by appellants’ appeal.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the trial court erred in granting summary judgment on fraud claims | DeArmitt argued misrepresentations as to value and structure constituted fraud in execution; reliance justiciable for a fact-finder | NYLIC/Bicker argued lack of damages and no misrepresentation under proper parol-evidence standards | Reversed and remanded; issues for trial-finder on reliance and damages |
| Damages and offset for life insurance benefits under UTPCPL | Damages should reflect expected value; offset for life insurance costs improper since not desired | Offset appropriate to reflect benefits and policy costs | Remanded for proper damages analysis; Nanty-Glo considerations apply to credibility |
| Effect of parol evidence and fraud-in-execution exception | Prior negotiations and illustrations relevant to misrepresentation; exception applies | Parol evidence rule bars extrinsic terms absent fraud exception | Parol evidence admissible; factual questions for the fact-finder on justifiable reliance |
| Application of Nanty-Glo rule and expert evidence on damages | Credibility determinations inappropriate at summary judgment; Nanty-Glo applies to oral testimony | Court could rely on admissible evidence to grant summary judgment | Reversed for remand; Nanty-Glo errors acknowledged and damages issues to be resolved by fact-finder |
Key Cases Cited
- Toy v. Metropolitan Life Ins. Co., 593 Pa. 20 (Pa. 2007) (fraud-in-execution exception to parol evidence rule; justifiable reliance can be factual)
- Yocca v. Pittsburgh Steelers Sports, Inc., 854 A.2d 425 (Pa. 2004) (parol evidence rule and integration; fraud cases; reliance considerations)
- Nanty-Glo v. American Surety Co. of New York, 163 A. 523 (Pa. 1932) (binding Nanty-Glo rule on credibility and summary judgment; oral testimony not sole basis)
- Glaab v. Honeywell Intl., Inc., 56 A.3d 693 (Pa. Super. 2012) (trial court must defer to expert conclusions at summary judgment; credibility for trier of fact)
- Penn Center House, Inc. v. Hoffman, 553 A.2d 900 (Pa. 1989) (summary judgment limits; oral testimony credibility concerns)
- Coleman v. Wyeth Pharmaceuticals, Inc., 24 A.3d 361 (Pa. Super. 2011) (deposition/testimony admissibility; judicial admissions not binding)
- Drelles v. Manufacturers Life Ins. Co., 835 A.2d 835 (Pa. Super. 2005) (non-commercial life insurance reliance principles)
- Bennett v. A.T. Masterpiece Homes at Broadsprings, LLC, 40 A.3d 145 (Pa. Super. 2012) (UTPCPL damages framework; liberal construction for consumer protection)
- Agliori v. Metropolitan Life Ins. Co., 879 A.2d 315 (Pa. Super. 2005) (UTPCPL damages; deterrence and need for justifiable reliance)