Yenchi, E. v. Ameriprise Financial, Aplts.
2017 Pa. LEXIS 1405
| Pa. | 2017Background
- In 1995–1997, financial advisor Bryan Holland (Ameriprise affiliates) solicited Eugene and Ruth Yenchi, provided a paid financial proposal, and recommended consolidation of life insurance into a whole‑life policy purchased in 1996 (and a deferred annuity in 1997).
- The Yenchis later learned (via independent review) the 1996 policy was underfunded and likely to lapse without increasing premiums; they sued (fraud, UTPCPL, negligence, bad faith, negligent supervision, breach of fiduciary duty).
- At summary judgment the trial court dismissed the fiduciary duty claim, concluding the Yenchis retained decision‑making control and no confidential relationship existed; other claims proceeded to trial.
- A jury found for defendants on fraud; trial court ruled for defendants on UTPCPL; the Superior Court reversed the trial court’s dismissal of the fiduciary‑duty claim, holding a fact question existed.
- The Pennsylvania Supreme Court granted review solely on whether the evidence could establish a fiduciary/confidential relationship and reversed the Superior Court, holding no fiduciary duty arose as a matter of law based on the record.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether a fiduciary/confidential relationship existed between the Yenchis and Holland | Yenchi: Holland held himself out as a paid financial advisor with superior expertise; Yenchis relied on and trusted him, creating a fact issue on dependence/overmastering influence | Appellants: No fiduciary duty absent cession of decision‑making; mere reliance on superior skill or payment for advice is insufficient | Held: No fiduciary duty; consumer transactions create a confidential relationship only when decision‑making control is ceded (explicitly or via overmastering undue influence) |
| Whether superior knowledge or charging a fee converts an arm’s‑length sale into a fiduciary relationship | Yenchi: Fee and expertise justified belief advice was in their best interests, supporting fiduciary status | Appellants: Allowing that would convert ordinary commercial dealings into fiduciary relationships for many sellers/providers | Held: Superior knowledge/fee alone do not create fiduciary duty; would unduly expand fiduciary law |
| Whether the Yenchis’ factual record (education, trust, document signing, following some recommendations) sufficed to create a genuine issue of material fact | Yenchi: Lack of financial sophistication and conduct (relying on Holland, signing documents, calling with questions) supports inference of dependence | Appellants: Evidence shows Yenchis made independent decisions, accepted some and rejected other recommendations, and signed authorizations—no surrender of control | Held: Evidence insufficient—Yenchis retained and exercised decision‑making; no overmastering influence shown |
Key Cases Cited
- In re Estate of Scott, 316 A.2d 883 (Pa. 1974) (confidential relationship exists only when one party surrenders substantial control or is subject to overmastering influence)
- Young v. Kaye, 279 A.2d 759 (Pa. 1971) (finding confidential relationship where one party ceded control by unquestioningly relying on another’s advice)
- Frowen v. Blank, 425 A.2d 412 (Pa. 1981) (confidential relationship and undue influence voided a sale involving an infirm party who relied entirely on neighbors)
- eToll, Inc. v. Elias/Savion Advertising, Inc., 811 A.2d 10 (Pa. Super. 2002) (mere reliance on superior skill does not create a fiduciary relationship)
- Basile v. H & R Block, Inc., 761 A.2d 1115 (Pa. 2000) (fiduciary duty requires more than provision of paid tax/financial services; relationship must go beyond ordinary commercial reliance)