# Toy v. Metropolitan Life Insurance > Supreme Court of Pennsylvania · July 18, 2007 · 593 Pa. 20 URL: https://www.frixlaw.com/law-library/cases/9649536 ## Case - **Full name:** Georgina TOY, Appellant/Cross-Appellee, v. METROPOLITAN LIFE INSURANCE COMPANY and Bob Martini, Appellees/Cross-Appellants - **Court:** Supreme Court of Pennsylvania - **Decided:** July 18, 2007 - **Citations:** 593 Pa. 20; 928 A.2d 186; 2007 Pa. LEXIS 1463 - **Precedential status:** Published - **Opinion:** Concurring in part by Saylor - **Judges:** Cappy, Castille, Newman, Saylor, Eakin, Baer, Baldwin, Former - **Cited by:** 323 later opinions in the Frix Law Library ## Citator (automated) - No negative treatment found by the automated citator. That is not the same as a confirmation that the case is good law; read the citing cases. - Full citator and citing cases: https://www.frixlaw.com/law-library/cases/9649536 ## How later opinions describe it (automated extraction) - explaining that, with Cowden, "Pennsylvania was joining the jurisdictions throughout the country that had held that an insurer may be liable for the entire amount of a judgment secured by a third party against the insured, regardless of any limitation in the policy, if the ins… - explaining in the context of a claim under the Unfair Trade Practices and Consumer Protection Law that “justifiable reliance is typically a question of fact for the fact-finder to decide, and requires a consideration of the parties, their relationship, and the circumstances su… - explaining that 42 Pa.C.S.A. § 8371 provides a remedy for an insurers’ breach of duty to act in good faith when performing obligations under an insurance policy which includes, *117 inter alia, paying a first party claim under the policy - holding that the General Assembly did not intend to give relief to an insured who alleged that his insurer engaged in unfair or deceptive practices in soliciting the purchase of an insurance policy when it enacted Section 8371 - holding that "justifiable reliance is typically a question of fact for the fact-finder to decide, and requires a consideration of the parties, their relationship, and the circumstances surrounding their transaction.” ## Opinion text *62 Justice SAYLOR, concurring and dissenting. I join Part I and 11(A) and (B) of the majority opinion. As to Part 11(C), however, I differ with the majority’s treatment of the parol evidence rule. The majority accepts that the allegations of Toy’s complaint concern a fully integrated contract but concludes that the parol evidence rule does not apply. See Majority Opinion, op. at 41-53, 928 A.2d at 205-07. The majority reasons, that Ms. Toy’s claim does not amount to fraud in the inducement (as to which the parol evidence rule would generally apply under prevailing Pennsylvania law), but rather, amounts to fraud in the execution (as to which the parol evidence rule does not apply). See id. In a footnote, the majority dismisses any argument that Ms. Toy’s claims reflect allegations of fraud in the inducement, as opposed to fraud in the execution, by indicating that Defendants have not challenged the Superior Court’s characterization of Ms. Toy’s allegations in this regard. See Majority Opinion, op. at 52 n. 23, 928 A.2d at 206 n. 23. In the first instance, although I agree with the majority that Defendants have not expressly controverted the Superior Court’s characterization of Ms. Toy’s as involving fraud in the execution, I believe that they have sufficiently challenged the Superior Court’s reasoning by arguing, at length, that this matter is governed by Yocca v. Pittsburgh Steelers Sports, Inc., 578 Pa. 479 , 854 A.2d 425 (2004), which the majority characterizes as a case involving fraud in the inducement. See Majority Opinion, op. at 49-50, 928 A.2d at 205. Therefore, I would not resolve the questions concerning the applicability of the parol evidence rule based on waiver. On the merits, Defendants advance an argument that there should be some reasonable limitations upon a party’s ability to advance affirmative claims that very plainly conflict with their integrated, written agreements, even when the plaintiff employs the rubric of fraud. In particular, Defendants highlight that Ms. Toy’s allegations as to the promise of a free-standing savings plan with an accumulated value of $100,000 in 23 years is squarely and repeatedly contradicted not only by the whole *63 life insurance policy which was the sole instrument that she received, 1 but also by the written application that she signed. 2 Defendants contend that applying an exception to the parol evidence rule in such circumstances would make the general rule so easy to avoid that it will amount to no rule at all. 3 I agree with the tenor of this argument. I believe that the parol evidence rule subsumes an objective to promote certainty and stability of contract, and to place some reasonable limitations on the litigation exposure of the business community and others, by investing contracting parties with an obligation to read their written agreements and abide by clear terms, short of an allegation of fraud of a sort that would not be obvious from the face of the integrated agreement, and/or in the absence of circumstances in which reading the written agreement would not be reasonable. Cf. Thorne v. Warfflein, 100 Pa. 519 (1882) (“We cannot agree that it is proper to throw the whole case into the jury box on the ground of fraud, *64 simply because one of two parties to a written contract testifies that there were parol stipulations contradictory to the terms of the 'writing, agreed to at the same time. There must be evidence of fraud other than that which may be derived from the mere difference in the parol and written terms. We can find no such evidence in the present case, and we are, therefore, of opinion that the learned court below was in error in leaving the question of fraud to the jury.”). 4 In terms of containing the fraud exception to the parol evidence rule, the approach in Pennsylvania has been to maintain a distinction between reliance on fraud in the “making” of prior oral representations, versus fraud in the “omission” of terms from a subsequent written contract. For example, in Bardwell v. Willis Co., 375 Pa. 503 , 100 A.2d 102 (1953), the Court stated: There is not the slightest doubt that if plaintiffs had merely averred the falsity of the alleged oral representations, parol evidence thereof would not have been inadmissible. Does the fact that plaintiffs further averred that these oral representations were fraudulently made without averring that they were fraudulently or by accident or mistake omitted from the subsequent complete written contract suffice to make the testimony admissible? The answer to this question is “no”; if it were otherwise the parol evidence rule would become a mockery, because all a party to the written contract would have to do to avoid, modify or nullify it would be to aver (and prove) that the false representations were fraudulenty (fraudulently) made. Id. at 507 , 100 A.2d at 104 (emphasis in original). 5 The Court, however, has not closely developed the boundaries between *65 fraudulent making and fraudulent omission, and it seems to me to be an open question whether it is sufficient, to lay claim to the fraud exception, for a contracting party to add to a claim of “fraudulent making” of representations concerning the subject matter of the integrated contract (a matter that is clearly outside the exception) an allegation that the defendant also suggested that the false terms were within the written contract, although they were most clearly not set forth in the contract. For the policy reasons set forth in Bardwell , I believe that the Court should not so extend the fraud exception. In my view, in terms of the potential for opening the exception to ready abuse, there is a very modest difference between the making of representations concerning the subject matter of a contract, and general misrepresentations concerning actual terms of the written contract. Moreover, where written contractual terms are clear and apparent, the ability to review the document protects equally against either form of misrepresentation. In my view, in maintaining an exception to the parol evidence rule for “fraud in the omission,” the Court should require something beyond mere obvious misrepresentations concerning the terms of an integrated contract. Here, the circumstances entailed Ms. Toy’s execution as the proposed insured of a document that was plainly, obviously, and consistently styled as an application for life insurance. Her position is, however, that she believed that the document was something entirely different based on Mr. Martini’s oral representations concerning the subject matter. See Deposition of Georgiana Toy, at 95 (“Mr. Martini never in the entire presentation of the material that was given that evening indicated that what I was buying was a life insurance policy. The entire presentation was totally regarding a 50/50 savings plan, as he referred to it, and it was an investment.”); 129 (“My assumption at the time was that what I was signing ... was a contract to the savings plan.”). In the absence of *66 anything more in terms of factual circumstances that would cause Ms. Toy not to read or apprehend the written terms of her application, I believe that such allegations should fall within the purview of the parol evidence rule rather than the exception. 6 I recognize that Ms. Toy’s complaint contains substantially broader allegations of fraud, in which she asserts that Metropolitan Life had essentially institutionalized the practice of marketing life insurance policies disguised as free-standing savings plans. I agree with Judge Wettick’s conclusion that she has failed to develop particular circumstances about her own transaction with Defendants such as would render her failure to apprehend its character sufficiently reasonable to justify excepting her claims from the effect of the parol *67 evidence rule. At least in the context of claims for affirmative monetary damages, as opposed to those for equitable remedies such as rescission and restitution, I therefore support Judge Wettick’s summary judgment determination. As a final note, fraud of the type alleged by Ms. Toy need not go without redress, as the Insurance Commissioner has the authority to investigate such asserted conduct and to take appropriate remedial measures under the Unfair Insurance Practices Act. See Act of July 22, 1974, P.L. 589, No. 205, as amended, 40 P.S. §§ 1171.1-1171.15. Justice CASTILLE joins this concurring and dissenting opinion. . The declarations page of the policy specifies a retirement-age guaranteed cash value of $11,000. . This application was entitled “APPLICATION FOR LIFE INSURANCE”; identifies Ms. Toy at the outset as the “Proposed Insured”; specifies a death benefit, provides for premium payments equal to the amount of Ms. Toy's investment; identifies a beneficiary; contains medical data consistent with an insurance application; and contains the words "Proposed Insured” immediately beneath the line on which Ms. Toy signed the application. Ms. Toy conceded in her deposition that she signed this application, but had either not read it or only skimmed it in reliance on Mr. Martini’s representations that it was an application for a savings plan and not a life insurance policy. See Deposition of Georgina Toy at 111-16, 122-23, 129, 146-50. . Cf. Williston on Contracts § 33.21, at 672 (4th ed.1999) (“[c'lourts have recognized ... that this fraud exception would swallow up the rule if representations made during negotiations, but not included in the contract as executed, could be characterized as fraud and then used to undo an otherwise complete agreement.” (citation omitted)); Annotation, Parol-evidence ride; right to show fraud in inducement or execution of written contract, 56 A.L.R. 13 , Pt. II ("That a mere failure to carry out an alleged parol promise made contemporaneously with a written agreement does not prove such a fraud in the inception of the contract as will warrant the admission of parol evidence to show the alleged promise at variance with the writing seems clear both on reason and according to the weight of authority. To hold otherwise would, as has been pointed out, be reasoning in a circle and be a virtual abrogation of the parol-evidence rule itself"). . In discussing Ms. Toy’s duties in relation to the reading of the written documents, notably, the majority only addresses her obligations relative to the reading of the life insurance policy. See Majority Opinion, op. at 54-55, 928 A.2d at 208. It makes no mention, however, of her failure to read (or otherwise apprehend the facial character of) the written application for life insurance which she signed. See supra note 2. . This concern appears to have been loosely translated into inducemenl/execution distinction the courts have made, although fraud in the inducement appears to most commonly be understood to encompass *65 misrepresentations about collateral facts and not facts concerning the nature or purport of the contract. See 37 Am.Jur 2d, Fraud and Deceit § 2 (2007). . Accord Domino’s Pizza, LLC v. Deak, 2007 WL 916896 , *7 (W.D.Pa. March 23, 2007) ("Where the party has had sufficient opportunity to review the agreement prior to execution, the ability to subsequently claim fraudulent execution is all but eliminated”); Belleville Nat'l Bank v. Rose, 119 Ill.App.3d 56 , 74 Ill.Dec. 779 , 456 N.E.2d 281, 284 (1983) ("The defense of fraud is, in most situations, unavailable to avoid the effect of the written agreement where the complaining party could have discovered the fraud by reading the instrument, and was in fact afforded a full opportunity to do so.”). See generally 4 Couch on Insurance § 56:15 (3d ed. 2007) ("[I]f the insured ... has ready access to the truth or to documents setting forth the truth, no liability of the insurer arises because of the agent's misstatements. Thus, the insured may be bound in spite of the agent’s fraud if tire insured signs the application without reading it, or retains the policy when delivered without reading it when such reading would have disclosed the falsity of the agent’s representations. ”). I acknowledge that there is some uncertainty in Pennsylvania regarding the scope of the reasonable expectations doctrine in the consumer insurance arena. I support the notion that consumers in this setting should not be disadvantaged for failing to study detailed policy terms at length in circumstances in which they could reasonably expect that coverage would be available. To Ms. Toy’s understanding, however, the main thrust of her agreement with Metropolitan Life did not involve an insurance policy; moreover, I support Judge Wettick's conclusion that it is simply not reasonable for one in Ms. Toy’s circumstances to maintain the understanding that she had secured a free-standing savings plan that was not life insurance, when the only application that she signed was one for life insurance, and the policy that she received was, on its face, materially out of sync with her asserted expectation. Notably, as well, the policy was subject to a ten-day "free-look” condition, providing Ms. Toy with a right to examine it, return it for any reason during that period, and secure a full refund. --- Source: Frix Law Library, https://www.frixlaw.com/law-library/cases/9649536. Public record. Not legal advice.