Richards v. Ameriprise Financial, Inc.

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.

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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

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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

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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’

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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,

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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?

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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.

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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.

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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

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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.

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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).

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(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:

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[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

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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

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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

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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

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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

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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)

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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.

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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.

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Judgment Entered.

Joseph D. Seletyn, Esq.

Prothonotary

Date: 12/16/2016

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