Richards v. Ameriprise Financial, Inc.
152 A.3d 1027
| Pa. Super. Ct. | 2016Background
- In 1994 James and Helen Richards purchased a $100,000 IDS Flexible Premium Adjustable Whole Life policy from agent Thomas Bouchard for $500/month (illustration showed level payments and assumed 8% interest).
- In 2000 Bouchard informed the Richards the policy might lapse due to lower interest rates; the Richards paid a $15,053.09 lump sum to maintain the policy.
- Mr. Richards died in 2005; the $100,000 death benefit was paid. The Richards had paid about $78,500 in total premiums.
- Mrs. Richards sued (filed 2001) for negligent and fraudulent misrepresentation, UTPCPL violations, breach of fiduciary duty, and negligent supervision; only UTPCPL and misrepresentation claims reached trial; fiduciary and negligent supervision were dismissed on summary judgment.
- After a bench trial the court found for the Estates on the pre‑amendment UTPCPL (catchall fraud provision), awarded treble damages and $50,000 punitive damages, and granted attorneys’ fees; punitive damages were later reversed on appeal and remanded to deduct that amount.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Which version of UTPCPL applies | Richards: apply pre‑1996 pre‑amendment catchall (fraud standard) because sale occurred in 1994 | Ameriprise: amended statute should not be applied retroactively | Held: pre‑amendment UTPCPL governs (sale date controls) |
| Did plaintiff prove UTPCPL claim (fraud/causation/ascertainable loss) | Richards: justifiable reliance on Bouchard’s representation; $15,053.09 incurred to avoid lapse — an ascertainable loss caused by misrepresentation | Ameriprise: plaintiffs failed to prove fraud or causation; lump sum may not have been caused by misrepresentation | Held: factfinder could reasonably conclude justifiable reliance, causation, and ascertainable loss by preponderance under pre‑amendment UTPCPL; verdict upheld |
| Effect of trial court dismissing common law fraud/negligent misrepresentation claims | Ameriprise: dismissal of fraud/negligent misrepresentation precludes UTPCPL recovery because elements overlap | Richards: UTPCPL private action requires only preponderance to prove fraud; common law fraud claim requires clear and convincing proof (higher burden) | Held: dismissal of common‑law fraud/negligent misrepresentation does not bar UTPCPL recovery because different claims have different elements and burdens of proof |
| Attorneys’ fees awarded under UTPCPL — reasonableness/proportionality | Ameriprise: fee award excessive, court failed to analyze reasonableness and proportionality given limited witnesses/trial | Richards: lengthy, complex litigation over many years; counsel obtained substantial restitution/treble damages on contingency; hourly rates supported | Held: trial court did not abuse discretion; fee awards upheld as reasonable and proportionate |
| Punitive damages under UTPCPL | Ameriprise: punitive damages are not authorized by UTPCPL and award was improper | Richards: punitive award justified by egregious conduct | Held: punitive damages reversed — UTPCPL does not authorize punitive damages; remanded to recalculate excluding $50,000 punitive award |
Key Cases Cited
- Wyatt, Inc. v. Citizens Bank of Pennsylvania, 976 A.2d 557 (Pa. Super. 2009) (standard of review for non‑jury verdicts and appellate deference to trial factfinder)
- Yenchi v. Ameriprise Fin., Inc., 123 A.3d 1071 (Pa. Super. 2015) (pre‑amendment UTPCPL applies when policy issued before amendment)
- Weinberg v. Sun Co., Inc., 777 A.2d 442 (Pa. 2001) (private plaintiff under pre‑amendment UTPCPL must prove common law fraud elements to show causation and reliance)
- Boehm v. Riversource Life Ins. Co., 117 A.3d 308 (Pa. Super. 2015) (application of pre‑amendment catchall and fraud proof requirements under UTPCPL)
- Gibbs v. Ernst, 647 A.2d 882 (Pa. 1994) (elements of common law fraud)
- Yocca v. Pittsburgh Steelers Sports, Inc., 854 A.2d 425 (Pa. 2004) (justifiable reliance and proximate causation principles)
- DeArmitt v. New York Life Ins. Co., 73 A.3d 578 (Pa. Super. 2013) (reliance in non‑commercial life insurance transactions often a factual question tied to the parties’ relationship)
- McCauslin v. Reliance Fin. Co., 751 A.2d 683 (Pa. Super. 2000) (UTPCPL does not authorize punitive damages; guidance on attorney fee considerations and defendant’s opportunity to contest fees)
- Neal v. Bavarian Motors, Inc., 882 A.2d 1022 (Pa. Super. 2005) (trial court’s fee determinations under UTPCPL reviewed for abuse of discretion)
- Sewak v. Lockhart, 699 A.2d 755 (Pa. Super. 1997) (factors for assessing reasonableness of counsel fees)
- Weissberger v. Myers, 90 A.3d 730 (Pa. Super. 2014) (fraud requires clear and convincing evidence, a higher burden than preponderance)