Cohan, C. v. United Services Automobile Assn. ( 2017 )

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NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37
CHARLES F. COHAN AND LISA K. IN THE SUPERIOR COURT OF
COHAN, PENNSYLVANIA
Appellants
v.
UNITED SERVICES AUTOMOBILE
ASSOCIATION,
Appellee No. 683 EDA 2016
Appeal from the Order Entered February 4, 2016
in the Court of Common Pleas of Monroe County
Civil Division at No.: 1066 Civil 2013
BEFORE: PANELLA, J., SHOGAN, J., and PLATT, J.*
MEMORANDUM BY PLATT, J.: FILED JANUARY 05, 2017
Appellants, Dr. Charles F. and Lisa K. Cohan, appeal from the trial
court’s order granting the preliminary objections filed by Appellee, United
Services Automobile Association, and dismissing their second amended
complaint with prejudice. We affirm.
We take the following relevant facts and procedural history from the
trial court’s February 4, 2016, opinion and our independent review of the
certified record. In 1984, while he was a captain in the United States Army,
Charles Cohan purchased an automobile insurance policy from Appellee with
a $100,000.00 per person liability limit. He maintained the policy with the
____________________________________________
*
Retired Senior Judge assigned to the Superior Court.
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same coverage limits through 2011. He married Lisa Cohan in 1995 and
added her to the auto policy as an “operator.” Appellee never advised
Appellants that they should increase their automobile liability coverage.
In 2002, Appellants purchased land and built a new home. On
December 6, 2002, they purchased homeowner’s insurance from Appellee
with liability coverage in the amount of $1,000,000.00 per occurrence.
On March 5, 2011, Lisa Cohan, while driving a Cohan vehicle, collided
with another vehicle, causing the driver fatal injuries. The administrator of
the estate of the decedent brought a wrongful death/survival action and
Appellee defended the action on behalf of Ms. Cohan. The matter settled for
$300,000.00, but Appellee paid only the policy limits of $100,000.00.
Appellants paid the remainder of the settlement amount.
On April 1, 2015, Appellants filed a complaint against Appellee,
claiming, inter alia, that it should have advised Dr. Cohan to increase the
auto liability policy limits over the years that he was a customer, and
requesting judgment in the amount of $200,000.00. Appellee filed
preliminary objections thereto. On September 28, 2015, Appellants filed a
second amended complaint. Appellee filed preliminary objections, which the
trial court granted by order and opinion entered February 4, 2016, and it
dismissed the complaint with prejudice. This timely appeal followed.1
____________________________________________
1
Pursuant to the trial court’s order, Appellants filed a timely concise
statement of errors complained of on appeal on March 9, 2016. See
(Footnote Continued Next Page)
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Appellants raise the following issues for our review:
1. Did the trial court err in holding that despite their twenty-
seven year, multi-policy insurer-insured relationship and
[Appellee’s] targeted affinity group based marketing, [Appellee]
had no duty to coordinate [Appellants’] liability [c]overage
across their policies or to reform the liability limits of their auto
policy?
2. Did the trial court err in granting [Appellee’s] preliminary
objection demurrer to [Appellants’] [Unfair Trade Practices and
Consumer Protection Law, 73 P.S. §§ 201-1—201-9.3] count by
holding that [Appellants] must plead that they were “lied to” and
that [Appellee’s] targeting affinity group based advertising
program was “puffery”?
3. Did the trial court err in declining to re-examine D’Ambrosio
[v. Pennsylvania Nat. Mut. Cas. Ins. Co., 431 A.2d 966 (Pa.
1981)] and hold that the [Unfair Insurance Practices Act, 40 P.S.
§§ 1171.1—1171.15] provides insurance consumers a private
right of action[?]
(Appellants’ Brief, at 11) (unnecessary capitalization omitted).
In reviewing an order granting preliminary objections, our standard of
review is as follows:
Preliminary objections in the nature of a
demurrer should be granted where the contested
pleading is legally insufficient. Preliminary objections
in the nature of a demurrer require the court to
resolve the issues solely on the basis of the
pleadings; no testimony or other evidence outside of
the complaint may be considered to dispose of the
legal issues presented by the demurrer. All material
facts set forth in the pleading and all inferences
_______________________
(Footnote Continued)
Pa.R.A.P. 1925(b). The court filed a Rule 1925(a) statement on March 10,
2016, in which it relied on the opinion it entered on February 4, 2016. See
Pa.R.A.P. 1925(a).
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reasonably deducible therefrom must be admitted as
true.
In reviewing a trial court’s grant of preliminary objections,
the standard of review is de novo and the scope of review is
plenary. Moreover, we review the trial court’s decision for an
abuse of discretion or an error of law.
Kilmer v. Sposito, 146 A.3d 1275, 1278 (Pa. Super. 2016) (citations and
quotation marks omitted).
In their first issue, Appellants argue the trial court erred by dismissing
the negligence counts where Appellee failed to “coordinate and equalize” the
limit of their automobile insurance policy with the later-selected liability limit
of their homeowner’s insurance policy. (Appellants’ Brief, at 21; see id. at
13-21). Specifically, “[Appellants’] complaint is that for decades [Appellee]
issued their auto insurance policy with a $100,000.00 liability limit and
continued the $100,000 liability limit even after writing their homeowner’s
policy with a $1,000,000.00 policy limit.” (Id. at 18). Appellants take issue
with the fact that at the time they purchased the homeowner’s policy, “no
one from [Appellee] thought to mention to [Appellants] that after 18 years
at $100,000.00, it might be time to increase their auto liability limit.” (Id.
at 4). This issue does not merit relief.
We begin by noting, “Pennsylvania courts have often stressed that the
insured has both the capacity and the duty to inquire about the scope of
insurance coverage, rather than rely on hand holding and substituted
judgment.” Wisniski v. Brown & Brown Ins. Co. of PA, 906 A.2d 571,
579 n.6 (Pa. Super. 2006), appeal denied, 920 A.2d 834 (Pa. 2007)
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(citations and quotation marks omitted). “[T]his Court [has] rejected
arguments . . . that an insurer has a duty to provide more comprehensive
notice and explanation of the benefits provided in the insured’s policy.”
Treski v. Kemper Nat. Ins. Companies, 674 A.2d 1106, 1114 (Pa. Super.
1996). The Treski Court stated that there is:
no justification in the law to impose the additional burden on
insurers that they anticipate and then counsel their insured on
the hypothetical, collateral consequences of the coverage chosen
by the insured. The basic contractual nature of insurance
coverage set forth in [our case law] requires fair dealing and
good faith on the part of the insurer, not hand holding and
substituted judgment. While we acknowledge insurance is an
area in which the contracting parties stand in somewhat special
relationship to each other, the relationship is not so unique as to
compel this Court to require an insurer to explain every
permutation possible from an insured’s choice of coverage. Each
insured has the right and obligation to question his insurer at the
time the insurance contract is entered into as to the type of
coverage desired and the ramifications arising therefrom. Once
the insurance contract takes effect, however, the insured must
take responsibility for his policy. We, therefore, decline to
extend the duties of an insurer to provide ongoing advice
concerning the limits of its coverage.
Id. (citations omitted).
Here, the trial court found that Appellee did not have a duty to advise
Appellants to purchase higher liability limits on their auto insurance policy,
regardless of the terms in the separate homeowner’s policy. (See Trial
Court Opinion, 2/04/16, at 13, 15). Upon review, we agree with the trial
court that Appellee had no obligation to advise Appellants of a disparity in
liability coverage that they should have been aware of, or to otherwise
“coordinate” or “equalize” the liability limits of two different policies. To the
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contrary, “[o]nce the insurance contract takes effect . . . the insured must
take responsibility for his policy.” Treski, supra at 1114 (citation omitted).
We also observe Appellants’ argument, that the two policies should have
been “equalized,” overlooks the salient fact that an automobile insurance
policy and a homeowner’s insurance policy are not coextensive and insure
against very different risks. Therefore, we conclude that the trial court did
not err in dismissing the negligence counts of the complaint. See Kilmer,
supra at 1278. Appellants’ first issue does not merit relief.
In their second issue, Appellants challenge the trial court’s dismissal of
the Unfair Trade Practices and Consumer Protection Law (UTPCPL) count by
arguing that the court erroneously interpreted the UTPCPL’s catchall
provision as requiring them to allege and prove common law fraud. (See
Appellants’ Brief, at 21-26). Appellants further maintain that the court
supported its finding that they failed to plead fraud by characterizing
Appellee’s advertising program aimed at U.S. military personnel as
“commercial puffery.” (Id. at 23; see id. at 25-26) (record citation
omitted). We disagree.
In Bennett v. A.T. Masterpiece Homes at Broadsprings, LLC, 40
A.3d 145 (Pa. Super. 2012), this Court examined the relevant standard for
the UTPCPL catchall provision. The Bennett Court concluded:
The UTPCPL provides a private right of action for anyone
who “suffers any ascertainable loss of money or property” as a
result of an unlawful method, act or practice. 73 P.S. § 201–
9.2(a). Upon a finding of liability, the court has the discretion to
award “up to three times the actual damages sustained” and
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provide any additional relief the court deems proper. Id.
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–1996 catchall provision prohibited
“fraudulent conduct” that created a likelihood of confusion or
misunderstanding. 73 P.S. § 201–2(4)(xvii). In 1996, the
General Assembly amended the UTPCPL and revised Section
201–2(4)(xxi) to add “deceptive conduct” as a prohibited
practice. The current catchall provision proscribes “fraudulent or
deceptive conduct which creates a likelihood of confusion or of
misunderstanding.” 73 P.S. § 201–2(4)(xxi) (emphasis added).
Pre-amendment decisions from this Court relied on the
plain language of the UTPCPL to hold proof of common law fraud
was necessary to state a claim under the catchall provision. . . .
* * *
. . . The legislature’s inclusion of “deceptive” in 1996 signaled
that either fraudulent or deceptive conduct would constitute a
catchall violation. The amendment also implied that deceptive
conduct is something different from fraudulent conduct.
Moreover, maintaining a standard that demands fraud even after
the amendment would render the legislature’s addition of
“deceptive” redundant and meaningless in a manner inconsistent
with well-established principles of statutory interpretation.
Overlooking the addition of “deceptive” would also neglect our
Supreme Court’s pronouncement that courts should liberally
construe the UTPCPL. For these reasons, we hold deceptive
conduct which creates a likelihood of confusion or of
misunderstanding can constitute a cognizable claim under
Section 201–2(4)(xxi).
* * *
. . . We further hold the court correctly instructed the jury on the
relevant standard for the UTPCPL catchall provision, when it
stated “misleading conduct” could constitute a violation[.]
Id. at 151–52, 154-56 (footnote and some citations omitted; emphasis in
original).
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Here, a review of the record belies Appellants’ contention that the trial
court erroneously required them to establish common law fraud, in
contravention of the Bennett decision. (See Appellants’ Brief, at 22).
Instead, the record reflects that the trial court expressly acknowledged that
the UTPCPL does not require pleading or proof of fraud, and that the law
prohibits fraudulent or deceptive conduct. (See Trial Ct. Op., at 15). The
court concluded:
[Appellants] have not alleged misrepresentations by
[Appellee] that would a support a finding of fraud or deception.
The Second Amended Complaint identifies [Appellee’s]
advertisements that service members “may trust [Appellee] to
meet all their insurance needs,” and that [Appellee] “would
protect the insurance needs of [U.S.] military and former
military personnel and their families.” (Second Amended
Complaint, 9/28/15, at ¶¶ 47, 54). [Appellants] make no
allegations that they were lied to about the proper limits they
should obtain, and the court has found that [Appellee] had no
contractual or tort duty to advise them of appropriate liability
limits for their needs. The statements complained of were
commercial puffery, not misrepresentations of fact.
(Id. at 16) (record citation formatting provided; emphasis added; case
citations omitted).
Thus, a review of the record indicates that the trial court was aware of
the appropriate standard for the UTPCPL catchall provision, and that it did
not erroneously require Appellants to plead the elements of common law
fraud. Appellants’ second claim does not merit relief.
In their final issue, Appellants challenge the trial court’s dismissal of
the Unfair Insurance Practices Act (UIPA) count by arguing that this Court
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should re-examine the Pennsylvania Supreme Court’s holding in
D’Ambrosio, supra, that there is no private right of action under the UIPA.
(See Appellants’ Brief, at 26-33). Appellants contend that “[t]his [C]ourt
should re-examine D’Ambrosio in the context of twenty-first century
insurance industry advertising[,]” and recognize a private right of action
under the UIPA. (Id. at 32; see id. at 33). This issue does not merit relief.
We begin by observing the well-settled principle that this Court is
bound by existing precedent. See Bell v. Willis, 80 A.3d 476, 479 (Pa.
Super. 2013), appeal denied, 89 A.3d 1282 (Pa. 2014) (“As an intermediate
appellate court, this Court is obligated to follow the precedent set down by
our Supreme Court. It is not the prerogative of an intermediate appellate
court to enunciate new precepts of law or to expand existing legal
doctrines.”) (citations omitted).
With respect to the UIPA, this Court has explained:
The purpose of the UIPA is
to regulate trade practices in the business of
insurance in accordance with the intent of congress .
. . by defining or providing for the determination of
all such practices in this state which constitute unfair
methods of competition or unfair or deceptive acts or
practices and by prohibiting the trade practices so
defined or determined.
40 P.S.A. § 1171.2. Thus, “[n]o person shall engage in this
state in trade practice which is defined or determined to be an
unfair method of competition or an unfair or deceptive act or
practice in the business of insurance pursuant to [the UIPA].”
40 P.S.A. § 1171.4. These statutory provisions are enforced by
the Pennsylvania Insurance Commissioner who is empowered “to
examine and investigate the affairs of every person engaged in
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the business of insurance in this state” to determine whether the
UIPA has been violated. 40 P.S.A. § 1171.7. If, after an
investigation, the Insurance Commissioner has a good faith
belief that a person has violated the UIPA, an administrative
hearing is to be held before the Commissioner. If the
Commissioner determines that a violation occurred, he may
impose sanctions, including a cease and desist order or the
suspension or revocation of the person’s license. 40 P.S.A. §
1171.9. The Commissioner may also seek civil penalties. 40
P.S.A. § 1171.11.
Jones v. Nationwide Prop. & Cas. Ins. Co., 995 A.2d 1233, 1236 (Pa.
Super. 2010), aff'd on other grounds, 32 A.3d 1261 (Pa. 2011).
In D’Ambrosio, our Supreme Court noted that the UIPA is to be
enforced by the Insurance Commissioner, and held that no private right of
action was created by the UIPA. See D’Ambrosio, supra at 969-70. It
stated:
There is no evidence to suggest, and we have no reason to
believe, that the system of sanctions established under the
Unfair Insurance Practices Act must be supplemented by a
judicially created cause of action. . . . Surely it is for the
Legislature to announce and implement the Commonwealth’s
public policy governing the regulation of insurance carriers. In
our view, it is equally for the Legislature to determine whether
sanctions beyond those created under the Act are required to
deter conduct which is less than scrupulous.
Id. at 970; see also Jones supra, at 1236 (“The UIPA does not create a
private cause of action.”) (citation omitted).
Here, although Appellants urge this Court to reconsider the
D'Ambrosio holding, we decline to do so, and reiterate that as an
intermediate appellate court, we are bound to follow existing precedent.
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See Bell, supra at 479. Therefore, Appellants’ final issue on appeal does
not merit relief. Accordingly, we affirm the order of the trial court.
Order affirmed.
Judgment Entered.
Joseph D. Seletyn, Esq.
Prothonotary
Date: 1/5/2017
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