Richards v. Ameriprise Financial, Inc. ( 2016 )


Menu:
  • J-A10007-16
    
    2016 PA Super 289
    RITA M. RICHARDS and CAROLINE J.                  IN THE SUPERIOR COURT OF
    RICHARDS, Co-Executrices of the ESTATE OF               PENNSYLVANIA
    JAMES G. RICHARDS and RITA M. RICHARDS
    and CAROLINE J. RICHARDS, Co-Executrices
    of the ESTATE OF HELEN RICHARDS
    v.
    AMERIPRISE FINANCIAL, INC., AMERIPRISE
    FINANCIAL SERVICES, INC., RIVERSOURCE
    LIFE INSURANCE COMPANY and THOMAS A.
    BOUCHARD
    Appellants                   No. 265 WDA 2015
    Appeal from the Judgment Entered November 14, 2014
    In the Court of Common Pleas of Allegheny County
    Civil Division at No(s): G.D. 01-006614
    RITA M. RICHARDS and CAROLINE J.                  IN THE SUPERIOR COURT OF
    RICHARDS, Co-Executrices of the ESTATE OF               PENNSYLVANIA
    JAMES G. RICHARDS and RITA M. RICHARDS
    and CAROLINE J. RICHARDS, Co-Executrices
    of the ESTATE OF HELEN RICHARDS
    Appellants
    v.
    AMERIPRISE FINANCIAL, INC., AMERIPRISE
    FINANCIAL SERVICES, INC., RIVERSOURCE
    LIFE INSURANCE COMPANY and THOMAS A.
    BOUCHARD
    No. 307 WDA 2015
    Appeal from the Judgment Entered November 14, 2014
    In the Court of Common Pleas of Allegheny County
    Civil Division at No(s): GD 01-006614
    BEFORE: GANTMAN, P.J., BENDER, P.J.E., and PANELLA, J.
    OPINION BY PANELLA, J.:                         FILED DECEMBER 16, 2016
    J-A10007-16
    Appellants, Ameriprise Financial, Inc., Ameriprise Financial Services,
    Inc., Riversource Life Insurance Company, and Thomas A. Bouchard, appeal
    from the judgment entered in the Allegheny Court of Common Pleas, in favor
    of Appellees, the Estate of James G. Richards and the Estate of Helen
    Richards,1 finding Appellants violated the Unfair Trade Practices Consumer
    Protection Law (“UTPCPL”), awarding treble damages and punitive damages,
    and allowing Appellees’ counsel to submit a petition for their fees and costs,
    which resulted in the subsequent award of attorneys’ fees and costs in favor
    of Appellees. We affirm in part, reverse in part, and remand for proceedings
    consistent with this opinion.2
    The relevant facts and procedural history of this case are as follows. In
    1994, Thomas Bouchard (“Bouchard”), a financial advisor of IDS Life,
    approached Mr. James G. Richards and Mrs. Helen Richards (collectively,
    “the Richards”), who were existing customers of IDS Life, and requested to
    perform a financial analysis for them. The Richards accepted Bouchard’s
    request. After the analysis was complete, Bouchard and the Richards met to
    discuss the results. Bouchard explained that based on Mr. Richard’s decision
    1
    Mrs. Helen Richards initially brought this case; however, Mrs. Richards died
    on November 6, 2015, and the Estate of Helen Richards is now proceeding in
    her place.
    2
    Appellees in this case filed conditional cross-appeals and thus are
    conditional Cross-Appellants. For reasons set forth later in this opinion, we
    need not address the issues raised in the cross-appeals because we have not
    completely reversed the judgment of the trial court relating to the UTPCPL
    claim.
    -2-
    J-A10007-16
    to take his pension without leaving much of a surviving pension for his
    spouse, the Richards faced a pension gap, meaning Mrs. Richards would not
    have enough money to cover her monthly expenses if Mr. Richards died first.
    To solve this dilemma, Bouchard recommended that Mr. Richards
    purchase a $100,000.00 IDS Life Flexible Premium Adjustable Whole Life
    Insurance Policy so Mrs. Richards would receive the Policy’s death benefit
    upon Mr. Richard’s death. The Richards agreed to purchase the Policy at a
    monthly premium payment of $500.00 with an annually scheduled premium
    of   $6,000.00.   Mrs.   Richards     testified   that   Bouchard   “just   said   the
    $100,000[.00 Policy] . . . was going to cost us $500[.00] a month.” N.T.
    Deposition of Mrs. Richards, 5/9/11, at 58. Bouchard provided the Richards
    with a Ledger Statement (otherwise commonly referred to as an Illustration)
    indicating the terms of the Policy.
    In 2000, Bouchard and the Richards met regarding the Policy.
    Bouchard testified that the meeting arose because the Richards did not want
    to continue paying $500.00 per month in premium payments, so they
    sought Bouchard’s advice regarding their options. In preparation for the
    meeting, Bouchard reviewed the Richards’ finances and the Policy and
    discovered the payment of $500.00 per month was no longer sufficient to
    fund the Policy and that it might lapse prematurely due to lower than
    expected interest rates. Given this information, Bouchard relayed to the
    Richards different options they could take regarding the Policy, which
    -3-
    J-A10007-16
    included a reduction of the death benefit, to make a lump sum payment into
    the Policy and continue paying premiums for a shorter time, or to increase
    the monthly premium payments for a period of time. The Richards opted to
    pay a lump sum payment into the Policy of $15,053.09 and agreed to pay
    premiums for a shorter period of time. As a part of the transaction,
    Bouchard prepared a document titled “Explanation of Transaction” which
    contained the following handwritten section: “We wished to add these
    additional funds to our present life policy to allow us to reduce the amount of
    time we will need to pay future premiums and to keep the policy in force due
    to lower than expected interest rates. Also this will not be subject to
    inheritance tax at our death.” Explanation of Transaction, at 3.
    Mr. Richards died on February 20, 2005. Ameriprise paid the
    $100,000.00 death benefit to Mrs. Richards shortly thereafter. The total
    amount of premium payments the Richards paid into the Policy for the
    $100,000.00 death benefit was approximately $78,500.00
    This suit was filed in 2001. Mrs. Richards sought damages for the
    $15,053.09 payment, plus interest, arguing that when Bouchard sold the
    Policy, he represented that no payments beyond the $500.00 monthly
    premium were required to fund it. The complaint asserted causes of action
    against    Appellants    for    negligent    misrepresentation,     fraudulent
    misrepresentation, violation of the UTPCPL, breach of fiduciary duty, and
    negligent supervision. Appellants moved for summary judgment claiming
    -4-
    J-A10007-16
    that Appellees failed to state legally sufficient claims, and on February 11,
    2014, the court entered an order denying summary judgment in favor of
    Appellees as to the misrepresentation claims and UTPCPL claim, but granting
    summary judgment in favor of Appellants as to the breach of fiduciary duty
    and negligent supervision claims. In its opinion, the court stated: “M[r]s.
    Richards’ testimony [would] support a finding that [Bouchard] represented
    that the insurance policy would remain in full force and effect until [Mr.
    Richards’] death if [Appellees] made $500.00 per month payments until [Mr.
    Richards’] death[;]” and “the document titled Explanation of Transaction
    which states, inter alia, that the additional funds [would] keep the policy in
    force due to lower than expected interest rates may support a finding that
    the additional $15,053.09 payment was made because otherwise the policy
    would not remain in full force and effect as represented.” Trial Court
    Opinion, filed 2/11/14, at 1 (emphasis in original).
    A bench trial was held on October 30, 2014, and November 3-4, 2014,
    on Appellees’ misrepresentation claims and UTPCPL claim. On November 14,
    2014,     the   court   entered   a   verdict   dismissing   the   fraudulent
    misrepresentation and negligent misrepresentation claims for Appellees’
    failure to sustain a burden of proof, but finding for Appellees on the UTPCPL
    claim and awarding treble damages and punitive damages, and allowing
    Appellees’ counsel to submit a petition for their fees and costs. Appellees’
    -5-
    J-A10007-16
    counsel thereafter submitted a fee petition that contained time related to
    litigating the UTPCPL claim.
    On November 21, 2014, Appellants filed a post-trial motion seeking
    relief on the UTPCPL claim. The Estate of James G. Richards also filed a post-
    trial relief motion on November 25, 2014, relating to the court’s admission of
    evidence in contravention of the Dead Man’s Act, 42 Pa.C.S.A. § 5930. The
    court subsequently denied both of these requests.
    Following briefing on the petition for attorneys’ fees and costs, the
    court entered an order on January 20, 2015, awarding counsel fees in favor
    of Appellees for $84,072.50 to Behrend and Ernsberger, P.C., and costs for
    $1,759.58, and counsel fees for $26,840.00 to the Massa Law Group. On
    January 29, 2015, Appellants filed a post-trial motion for relief relating to
    court’s award of attorneys’ fees and costs, but the court subsequently denied
    Appellants’ request.
    Appellants filed a timely notice of appeal and Appellees filed notice of
    conditional cross-appeals. Thereafter, the court ordered Appellants and
    Appellees to file concise statements of errors complained of on appeal,
    pursuant to Pa.R.A.P. 1925(b); Appellants and Appellees timely complied.
    The court then filed an opinion. The panel found the trial court’s opinion
    deficient and remanded “for the preparation of a comprehensive opinion
    pursuant to Rule 1925(a)….” Richards v. Ameriprise Financial, Inc.,
    No(s). 265 WDA 2015 and 307 WDA 2015, at 4 (Pa. Super., filed July 19,
    -6-
    J-A10007-16
    2016) (unpublished per curiam memorandum). The trial court filed a
    supplemental opinion on September 21, 2016.
    Before we proceed to the merits, we must address the trial court’s
    supplemental opinion. After its filing, Appellants filed an “Application for
    Leave to File Brief in Response to the Supplemental Opinion of the Trial
    Court” (“Application”). In that filing, Appellants noted that their reason for
    seeking leave to file a response to the trial court’s opinion stems from the
    supplemental opinion’s raising “factual and legal issues that were not
    previously briefed by the parties….” Application, filed 9/26/16, at ¶ 8.
    The supplemental opinion is lacking. It contains no citations to the
    voluminous record. And the few legal citations provided are largely
    inapposite. In this complex case, a more carefully crafted and thorough
    opinion would have made for far more efficient appellate review. But the
    supplemental opinion, deficient as it is, provides the court’s findings that
    permit resolution of the case. We refuse to delay the resolution of this
    appeal any further. We deny Appellant’s Application and proceed to the
    merits.
    Appellants raise the following issues for our review:
    WHETHER THE TRIAL COURT ERRED IN ENTERING A VERDICT
    FOR [APPELLEES] UNDER THE PRE-AMENDMENT [UTPCPL]—
    WHICH REQUIRES PROOF OF THE COMMON LAW ELEMENTS OF
    FRAUD—DESPITE EXPRESSLY FINDING THAT [APPELLEES]
    FAILED TO PROVE EVEN A NEGLIGENT MISREPRESENTATION?
    -7-
    J-A10007-16
    IN THE ALTERNATIVE, WHETHER THE TRIAL COURT ERRED IN
    ENTERING A NON-JURY VERDICT ON THE UTPCPL CLAIM
    DESPITE NO EVIDENCE OF CAUSATION?
    WHETHER THE TRIAL COURT ERRED IN ITS AWARD OF
    ATTORNEYS’ FEES UNDER THE UTPCPL BECAUSE THE AMOUNT
    AWARDED IS UNREASONABLE?
    [WHETHER] THE TRIAL COURT ERRED BY AWARDING BOTH
    PUNITIVE AND TREBLE DAMAGES UNDER THE UTPCPL?
    Appellants’ Brief, at 5.3
    For purposes of disposition, we address Appellants’ issues together.
    Appellants argue that Appellees’ claim brought under the UTPCPL’s catch-all
    provision requires application of the pre-amendment version of the statute,
    which originally prohibited “engaging in any other fraudulent conduct which
    creates a likelihood of confusion or of misunderstanding,” see 73 Pa.S.A. §
    201-2(4)(xvii), because the Policy was sold to the Richards in 1994 and the
    alleged misrepresentation occurred in 1994 before the statute was amended
    in 1996. Otherwise, Appellants complain the application of the amended
    statute would result in an impermissible retroactive application of the law.
    Appellants contend the UTPCPL claim must fail for Appellees’ failure to
    meet their burden to sustain it. Appellants explain to prove a claim under
    the pre-amendment UTPCPL, Appellees were required to demonstrate the
    elements of common law fraud by a preponderance of the evidence.
    Appellants emphasize that the trial court expressly found Appellees failed to
    sustain their burden of proof for the fraudulent misrepresentation and
    3
    For purposes of disposition, we have rearranged Appellants’ issues.
    -8-
    J-A10007-16
    negligent misrepresentation claims. These claims, Appellants contend, have
    identical elements except that negligent misrepresentation has a lesser
    scienter requirement than fraudulent misrepresentation. So, Appellants aver
    because the court expressly found that they did not prove the elements of
    even the negligent misrepresentation claim by a preponderance of the
    evidence, the UTPCPL claim should likewise fail for Appellees’ failure to meet
    their burden of proof.
    Alternatively, Appellants assert the UTPCPL claim must fail because
    Appellees failed to prove an ascertainable loss was caused by the alleged
    misrepresentation. Specifically, Appellants maintain Appellees were required
    to show that “but for” the prohibited actions, Appellees would not have
    suffered an ascertainable loss. Appellants complain the record is devoid of
    evidence indicating that the lump sum payment occurred as the result of
    Bouchard’s alleged misrepresentation and the court impermissibly inferred
    causation simply because the Richards tendered the lump sum payment into
    the Policy after Bouchard recommended they do so.
    Appellants urge the trial court improperly granted Appellees’ petition
    for attorneys’ fees for all of the time requested because Mr. Behrend,
    counsel for Helen Richards, has been involved in insurance litigation for
    thirty years; only three witnesses were called to testify at the bench trial;
    Appellees’ claims are identical to a number of claims litigated by Mr.
    Behrend; and the court failed to analyze the fee petition for reasonableness.
    -9-
    J-A10007-16
    Appellants submit the UTPCPL does not confer the right to punitive
    damages, so the trial court’s imposition of $50,000.00 in punitive damages
    against Appellants constitutes reversible error. Alternately, Appellants
    contend the lump sum payment was not such “outrageous” conduct as that
    prohibited under the statute so as to award additional fees to Appellees.
    Appellants conclude this Court should reverse the verdict of the trial court
    and enter a verdict for Appellants on the UTPCPL claim, and reverse the trial
    court’s award of punitive damages and its award of attorneys’ fees. We
    disagree in part and agree in part.
    Our appellate role in cases arising from non-jury trial verdicts is
    to determine whether the findings of the trial court are
    supported by competent evidence and whether the trial court
    committed error in any application of the law. The findings of
    fact of the trial judge must be given the same weight and effect
    on appeal as the verdict of a jury. We consider the evidence in a
    light most favorable to the verdict winner. We will reverse the
    trial court only if its findings of fact are not supported by
    competent evidence in the record or if its findings are premised
    on an error of law. However, [where] the issue . . . concerns a
    question of law, our scope of review is plenary.
    The trial court’s conclusions of law on appeal originating from a
    non-jury trial are not binding on an appellate court because it is
    the appellate court's duty to determine if the trial court correctly
    applied the law to the facts of the case.
    Wyatt, Inc. v. Citizens Bank of Pennsylvania, 
    976 A.2d 557
    , 564 (Pa.
    Super. 2009) (citation and internal quotations omitted; brackets in original).
    Preliminarily, we address Appellants argument that the pre-amended
    version of the UTPCPL applies to the instant case. Statutory interpretation
    presents a question of law. See Snead v. Soc'y for Prevention of Cruelty
    -10-
    J-A10007-16
    to Animals of Pa., 
    985 A.2d 909
    , 912 (Pa. 2009). Thus, our standard of
    review is de novo, and our scope of review is plenary. See 
    id.
     Here, the
    allegedly deceptive practices that support Appellees’ UTPCPL claim all
    occurred prior to the date on which the UTPCPL was amended. 4 Accordingly,
    the pre-amended version of the statute controls. See Yenchi v. Ameriprise
    Fin., Inc., 
    123 A.3d 1071
    , 1083-84 (Pa. Super. 2015), appeal granted, 
    134 A.3d 51
     (Pa. 2016) (finding the date on which IDS Life Insurance policy was
    issued occurred prior to the UTPCPL amendment and therefore the pre-
    amendment version of the statute controlled).
    The UTPCPL is Pennsylvania’s consumer protection law. It seeks to
    prevent “[u]nfair methods of competition and unfair or deceptive acts or
    practices in the conduct of any trade or commerce….” 73 P.S. § 201–3. Its
    aim is to protect the public from unfair or deceptive business practices. See
    Agliori v. Metropolitan Life Ins. Co., 
    879 A.2d 315
    , 318 (Pa. Super.
    2005). Our Supreme Court has stated courts should liberally construe the
    UTPCPL in order to effect the legislative goal of consumer protection. See
    Com., by Creamer v. Monumental Properties, Inc., 
    329 A.2d 812
    , 816-
    17 (Pa. 1974).
    The UTPCPL provides a private right of action for anyone who “suffers
    any ascertainable loss of money or property” because of an unlawful
    method, act or practice. See 73 P.S. § 201–9.2(a). Upon a finding of
    4
    The Policy was issued in 1994.
    -11-
    J-A10007-16
    liability, the court has the discretion to award “up to three times the actual
    damages sustained” and provide any additional relief the court deems
    proper. Id. However, the statute does not “confer a right to [impose]
    punitive damages.” McCauslin v. Reliance Fin. Co., 
    751 A.2d 683
    , 685
    (Pa. Super. 2000). Section 201–2(4) lists twenty enumerated practices
    which constitute actionable “unfair methods of competition” or “unfair or
    deceptive acts or practices.” 73 P.S. § 201–2(4)(i)–(xx). The UTPCPL also
    contains a catchall provision at 73 P.S. § 201–2(4)(xxi). The pre–amended
    catchall provision prohibited “fraudulent conduct” that created a likelihood of
    confusion or misunderstanding. 73 P.S. § 201–2(4)(xvii).5
    To bring a private cause of action under the pre-amended version of
    the catchall provision of the UPTCPL, a plaintiff must establish common law
    fraud by a preponderance of the evidence. See Weinberg v. Sun Co., Inc.,
    
    777 A.2d 442
    , 446 (Pa. 2001) (“Nothing in the legislative history suggests
    that the legislature ever intended statutory language directed against
    consumer fraud to do away with the traditional common law elements of
    reliance and causation.”); Boehm v. Riversource Life Ins. Co., 
    117 A.3d 308
    , 323 (Pa. Super. 2015), appeal denied, 
    126 A.3d 1281
     (Pa. 2015)
    (holding to establish a claim for common law fraud under the pre-amended
    catchall provision of the UTPCPL, the elements must be proven by a
    preponderance of the evidence). The elements of common law fraud include:
    5
    Prior to 1996, the catchall provision was codified at 73 P.S. § 201–
    2(4)(xvii). It was recodified at 73 P.S. § 201–2(4)(xxi).
    -12-
    J-A10007-16
    (1) a representation; (2) which is material to the transaction at
    hand; (3) made falsely, with knowledge of its falsity or
    recklessness as to whether it is true or false; (4) with the intent
    of misleading another into relying on it; (5) justifiable reliance
    on the misrepresentation; and (6) the resulting injury was
    proximately caused by the reliance.
    Gibbs v. Ernst, 
    647 A.2d 882
    , 889 (Pa. 1994) (footnote omitted). In other
    words, “a plaintiff must show that he justifiably relied on the defendant’s
    wrongful conduct or representation and that he suffered harm as a result of
    that reliance.” Yocca v. Pittsburgh Steelers Sports, Inc., 
    854 A.2d 425
    ,
    438 (Pa. 2004) (citations omitted). Justifiable reliance in the non-commercial
    life insurance context is typically a question of fact and often involves
    credibility determinations for the fact-finder to decide, because the fact-
    finder must consider “the relationship of the parties involved and the nature
    of the transaction” to determine whether the purchasers justifiably relied
    upon the agent’s representations to the extent necessary to support their
    UTPCPL claim. DeArmitt v. New York Life Ins. Co., 
    73 A.3d 578
    , 592-93
    (Pa. Super. 2013) (citing Drelles v. Manufacturers Life Ins. Co., 
    881 A.2d 822
    , 841 (Pa. Super. 2005)). To recover damages under the UTPCPL, a
    plaintiff must demonstrate “an ascertainable loss as a result of the
    defendant's prohibited action.” Weinberg, 777 A.2d at 446 (emphasis in
    original).
    Instantly, the trial court provided the following reasoning for its
    disposition:
    -13-
    J-A10007-16
    [The Richards] became clients of [Bouchard] in 1994. They
    retained Bouchard as their financial advisor on an annual basis
    for an annual fee of $300.00. [Bouchard] was also an agent of
    IDS [Life] Insurance, which eventually became Ameriprise.
    In July of 1994, the Richards met with Bouchard at his office in
    Washington, PA. Bouchard warned them that they were facing a
    potential pension trap, wherein Mrs. Richards could suffer a
    substantial reduction in income should Mr. Richards pass first.
    [Bouchard] presented the Richards with a financial plan, which
    included the proposed purchase of a $100,000.00 [IDS Life
    Flexible Premium Adjustable Whole Life Insurance Policy] on Mr.
    Richards’ life. [Bouchard] showed the Richards an Illustration
    and application. The application [became] part of the contract.
    The Illustration demonstrated that the [annually scheduled]
    premium payments on the Policy would remain $6,000.00 per
    year, for the life of the Policy . . . and then go to zero payments.
    The monthly [premium] payments would remain at $500[.00]
    per month for the life of the Policy. The Illustration also assumed
    that the interest rates would be 8% for the life of the Policy,
    although the [applicable interest rate] in July of 1994 was
    6.75%. The application indicated the same. Neither [e]xhibit
    contained any information that would alert any consumer that a
    fluctuation of interest rates of any other occurrence could result
    in an extra payment or an increase in premiums at a future date.
    When examined at trial [Bouchard] and corporate witness Mr.
    Freiler could not ascertain that either the Illustration or
    application contained any information indicating that the Policy
    may not continue at the same premiums for its life.
    Further, Mrs. Richards testified that [Bouchard] assured her and
    Mr. Richards that the level of payments of $500[.00] per month
    would be all that was needed to keep the Policy in force for life.
    The Richards made the application for the [Policy] in reliance
    upon [Bouchard’s] recommendations….
    The Richards’ application was accepted and they received their
    Policy in August of 1994. The Policy itself set forth no
    information which would conflict with the information contained
    in the Illustration and the application. Mr. Freiler, a
    representative of Ameriprise, could not identify any section of
    the exhibits which would alert a consumer that anything more
    -14-
    J-A10007-16
    than the scheduled payments would be needed to keep the
    Policy in force. He testified that the average person would not
    understand the features in this type of insurance policy. He could
    not condone an agent’s misrepresentation that an [IDS Life
    Flexible Premium Adjustable Whole Life Insurance Policy] would
    remain in at a level premium for the life of the policy.
    The Richards made their monthly premiums of $500[.00] for the
    next seven (7) years, and [Bouchard] remained their financial
    advisor. In 2000, in preparation for the Richards’ annual review,
    [Bouchard] conducted an in force Illustration [which indicated]
    that the Policy might lapse within the next [five (5)] years due to
    fluctuation of interest rates. The interest rates had fallen to
    6.25%.
    When [Bouchard] met with the Richards in 2000, he informed
    them of the indications that the Policy may lapse in the future.
    This would have been the first time the Richards were made
    aware that the policy was not as it had been represented by
    [Bouchard] at the time of purchase.
    While [Bouchard] testified at trial that it was Mr. Richards who
    first approached [Bouchard] stating that he wanted to pay a
    lump sum into the [Policy] so that he could pay off his premiums
    sooner than scheduled, this testimony was rejected. Bouchard
    prepared illustrations demonstrating how various lump sum
    payments would affect the Policy performance, but it was
    decided that a [$15,053.09] prepayment was needed. This
    necessity was evidenced by . . . a document titled “Explanation
    of Transaction,” and the fact that there was no advantage in
    paying [$15,053.09] into the [Policy] that one would never get
    back, only to make the cost of the Policy higher.
    The “Explanation of Transaction” is an internal document
    showing where the [$15,053.09] payment is coming from, in this
    case, [Appellees’] mutual fund. At the bottom of the document
    are Mr. Richards’ and [Bouchard’s] signatures and [Bouchard’s]
    handwritten note explaining the reason for the movement of the
    mutual funds into the [Policy]: “added to life chase value to
    allow a reduction of future premiums,” but also “to keep the
    Policy in force due to lower than expected interest rates.” While
    [Bouchard] insisted that a lapse was not the main reason for the
    [$15,053.09] payment, that testimony was not believed. Paired
    with the Illustration indicating a future policy lapse and the
    -15-
    J-A10007-16
    absence of any advantage in making the lump sum payment for
    the reason Bouchard proffered, the possibility of the Policy
    lapsing after the Richards had paid tens of thousands [of dollars]
    in premiums would have been catastrophic.
    After signing the “Explanation of Transaction” the Richards
    received the funds from the mutual fund account and wrote a
    $15,053.09 check to [Appellant’s] corporation . . . with the noted
    reason: “for Jim’s insurance.” Having been advised by their
    financial advisor that their insurance policy was in trouble of
    lapsing and it needed a lump sum payment to keep it in force,
    [the court] found that the Richards relied on [Bouchard] in
    making that payment.
    The [c]ourt found negligent misrepresentation inapplicable here
    because the corporation’s documents used in the sales
    presentation as well as the financial advisor’s misrepresentation
    as to the cost of the [Policy] were not negligent
    misrepresentations. They were intentional misrepresentations as
    to the cost of the [Appellees Policy]. [The court found] that the
    misrepresentations made by the financial advisor were
    fraudulent. Under the [UTPCPL, Appellants] succeeded in proof of
    fraud by a preponderance of the evidence.
    Trial Court Opinion, filed 9/21/16, at 4-6.
    The record supports the court’s conclusion. It was within the province
    of the court as the fact-finder to believe Mrs. Richards’s testimony and
    deduce from the Policy Illustration, insurance application, and the corporate
    representative that in 1994 Bouchard misrepresented that the cost of the
    Policy would only be $500.00 per month. See Wyatt; Yocca. It was also
    within the province of the court as the fact-finder to find the Richards
    justifiably   relied   upon   Bouchard’s   1994   misrepresentation   and   his
    subsequent 2000 representation that a lump sum payment into the Policy
    was necessary to prevent it from lapsing, especially given the relationship
    -16-
    J-A10007-16
    between the parties as financial planner and client. See Wyatt; DeArmitt.
    The Richards’ suffered an ascertainable loss at the payment of $15,053.09
    into the Policy. See 73 P.S. § 201–9.2(a).
    With regard to Appellants’ specific claim that Appellees failed to prove
    they suffered an ascertainable loss as a result of Bouchard’s representation,
    this contention is without merit. Appellees met their burden by a
    preponderance of the evidence. See Weinberg; Boehm. The “Explanation
    of Transaction” stated the Richard’s payment was designed to “keep the
    policy in force due to lower than expected interest rates” and Bouchard’s
    testimony indicated that the Policy would not increase its cash value upon
    the payment of the lump sum:
    [The court]: Am I missing something here? Because I think you
    said yesterday he doesn’t get that added cash value.
    [Bouchard]: No.
    [The court]: If he dies, he doesn’t get the added cash value and
    the 100,000.
    [Bouchard]: Exactly.
    [The court]: He only gets the 100,000.
    [Bouchard]: And he knew that.
    N.T., Trial, 11/4/14, at 252. The court interpreted this testimony as support
    for the reasoning behind why the Richards made a lump sum payment into
    the Policy—to keep the Policy in force and prevent it from lapsing. See
    Weinberg; Boehm. In a light most favorable to Appellees as the verdict
    -17-
    J-A10007-16
    winner, we observe Appellees met their burden of proof on causation under
    the UTPCPL. See Wyatt; Monumental Properties, Inc..
    To the extent Appellants argue that the court’s dismissal of Appellees’
    fraudulent   misrepresentation   and   negligent   misrepresentation   claims
    necessarily precludes a verdict on the UTPCPL claim because the elements of
    each offense are similar, this claim fails. Under the pre-amended version of
    the UTPCPL, a plaintiff must establish common law fraud by a preponderance
    of the evidence by showing that she justifiably relied on the defendant’s
    wrongful conduct or representation and that she suffered harm as a result of
    that reliance. See Yocca. The burden of proof to demonstrate common law
    fraud, on the other hand, must be shown by clear and convincing evidence.
    See Weissberger v. Myers, 
    90 A.3d 730
    , 735 (Pa. Super. 2014)
    (explaining that a party proving fraud must meet the more exacting
    standard of clear and convincing evidence, which is a higher standard of
    persuasion than mere preponderance of the evidence). And negligent
    misrepresentation requires the existence of a duty owed by one individual to
    another. See Heritage Surveyors & Engineers, Inc. v. Nat'l Penn Bank,
    
    801 A.2d 1248
    , 1252 (Pa. Super. 2002) (“The elements of negligent
    misrepresentation differ from intentional misrepresentation in that the
    misrepresentation must concern a material fact and the speaker need not
    know his or her words are untrue, but must have failed to make a
    reasonable investigation of the truth of these words. Moreover, like any
    -18-
    J-A10007-16
    action in negligence, there must be an existence of a duty owed by one
    party to another.”) Thus, each claim has separate and distinct elements that
    must be proven according to its applicable burden of proof. Based on the
    foregoing, the trial court correctly found Appellees met their burden for the
    UTPCPL claim, but failed to meet their burden for the misrepresentation
    claims.
    Regarding Appellants claim that the trial court erred in awarding all of
    Appellees’ attorneys’ fees and costs under the UTPCPL, this argument is
    meritless. We are mindful that we may not disturb a trial judge’s assessment
    of these amounts unless there has been an abuse of discretion. See Neal v.
    Bavarian Motors, Inc., 
    882 A.2d 1022
    , 1029 (Pa. Super. 2005). Under the
    UTPCPL, the following factors should be considered when assessing the
    reasonableness of counsel fees:
    (1) The time and labor required, the novelty and difficulty of the
    questions involved and the skill requisite properly to conduct the
    case; (2) The customary charges of the members of the bar for
    similar services; (3) The amount involved in the controversy and
    the benefits resulting to the clients from the services; and (4)
    The contingency or certainty of the compensation.
    Sewak v. Lockhart, 
    699 A.2d 755
    , 762 (Pa. Super. 1997) (quoting Croft v.
    P. & W. Foreign Car Service, 
    557 A.2d 18
    , 20 (Pa. Super. 1989)).
    Subsequently, in McCauslin, this Court held that prior to awarding
    counsel fees to a plaintiff on a UTPCPL claim, the defendant must have “a
    fair opportunity to address” the legitimacy of the claim. In remanding the
    case for further proceedings, this Court made the following observations: (1)
    -19-
    J-A10007-16
    there should be “a sense of proportionality between an award of damages
    [under the UTPCPL] and an award of attorney’s fees,” and (2) whether
    plaintiff has pursued other theories of recovery in addition to a UTPCPL claim
    “should [be] given consideration” in arriving at an appropriate award of fees.
    
    751 A.2d at
    685–686.
    Here, the trial court provided the following reasoning for the award of
    Appellees’ attorneys’ fees and costs:
    The present case was filed in 2001. One of the [Appellees], Mr.
    James Richards, passed away in February of 2005. Proof of
    misrepresentation became much more difficult after that
    occurrence. It was essential that [Appellees] obtain from
    [Appellants] the corporate documents establishing, in addition to
    witness testimony, that [Appellants’] sales practices were more
    than just misleading, but that the consumer was deceived and
    defrauded as to the nature of the product they sold. Much
    pretrial discovery was required, and [Appellees] needed to
    withstand a [m]otion for [s]ummary [j]udgment. The case was
    complex.
    There is precedent for a similar award of attorneys’ fees in
    Boehm. [Appellees’] counsel in the present case was the same
    Plaintiff’s counsel in Boehm. [Appellees’] counsel requested the
    same hourly rate which was approved in Boehm at $400.00 per
    hour. [Appellees’] counsel removed the non-UTPCPL [work in
    their petition] as required by Neal.
    Trial Court Opinion, filed 9/21/16, at 7.
    We agree. And the record supports the court’s conclusion. This case
    involved the sale of a universal life insurance policy, which is a complicated
    instrument, and the complaint allegations required that counsel understood
    how these policies work and the regulations that apply to them. Customary
    charges from other members of the bar range from $275 to $400 per hour.
    -20-
    J-A10007-16
    Appellees received $34,006.44 in restitution and $102,019.32 in treble
    damages as a result of counsels’ services in the face of corporate
    adversaries with greater resources than Appellees, and counsel did so on a
    contingent basis for approximately thirteen years. See Sewak. Based on the
    foregoing, there seems to be proportionality between the award of damages
    and attorneys’ fees and costs. See McCauslin. Accordingly, the trial court
    properly imposed the attorneys’ fees and costs in the amounts of
    $84,072.50 to Behrend and Ernsberger, P.C., and costs in the amount of
    $1,759.58, and counsel fees in the amount of $26,840.00 for the Massa Law
    Group. See Neal.
    With respect to Appellants’ assertion that the court improperly
    imposed both punitive damages and treble damages upon Appellants in
    contravention to the UTPCPL, we agree. The trial court had the discretion to
    award to treble damages, but the trial court was prohibited from imposing
    punitive damages under the statute. See 73 P.S. § 201–9.2(a); see also
    McCauslin. Here, the trial court imposed $50,000.00 in punitive damages
    against Appellants. This action was improper, and accordingly we reverse
    the award of punitive damages and remand this issue to the trial court for a
    recalculation of damages excluding the $50,000.00.
    Judgment affirmed in part and reversed in part. Motion denied. Case
    remanded    for   proceedings   consistent   with   this   opinion.   Jurisdiction
    relinquished.
    -21-
    J-A10007-16
    Judgment Entered.
    Joseph D. Seletyn, Esq.
    Prothonotary
    Date: 12/16/2016
    -22-