PITTSBURGH – The Superior Court of Pennsylvania has remanded an insurance case to the Allegheny County Court of Common Pleas for a new trial.
Judges John T. Bender, Anne E. Lazarus and Sallie Updyke Mundy ruled in this case in September, as Bender authored the decision to partially affirm, partially reverse, vacate judgment and remand the case to the trial court for further proceedings.
Eugene R. Yenchi and Ruth I. Yenchi appealed the non-monetary judgment found against them by the trial court on May 5, 2014, and in the favor of appellees Ameriprise Financial, Inc., Ameriprise Financial Services, Inc., RiverSource Life Insurance Company and Bryan Gregory Holland.
The lynchpin of the Yenchis’ case was alleging improper sales practices on the part of the appellees, which induced them to purchase life insurance.
Holland contacted the Yenchis in 1995 offering assistance as a financial advisor, and later met with them that year to discuss their financial future. Holland offered the Yenchis several avenues to plan for their retirement, including consolidating several life insurance policies into a single policy with a monthly premium of $240 and purchasing a deferred, variable annuity for Ruth, which would mature when she reached the age of 65. The Yenchis accepted and executed both options.
When having those arrangements independently analyzed in 2000, they saw the life insurance policy was underfunded and the annuity for Ruth would mature when she turned 84, not 65, they say.
This led the Yenchis to file a lawsuit in November 2003, for “negligent misrepresentation, fraudulent misrepresentation, violation of the Unfair Trade Practices Consumer Protection Law (UTPCPL), bad faith, breach of fiduciary duty, and negligent supervision.” Though, the negligent misrepresentation and breach of fiduciary duty claims were dismissed prior to trial in January 2014.
The trial court found in favor of the defendants on the UTPCPL and fraudulent misrepresentation claim.
However, the Yenchis raised several issues on appeal, including ones relating to the dismissal of the breach of fiduciary duty claim and using a pre-amended 1996 version of the statute to dismiss their UTPCPL claim.
The Superior Court found the trial court’s grounds for dismissing the breach of fiduciary claim as “flawed” and “too rigid.”
“Appellees presented a narrow claim for summary judgment on the Yenchis’ fiduciary claim. The court’s application of a flawed rule of law and failure to conduct a proper analysis renders its decision an abuse of discretion. Accordingly, we reverse the trial court on this ground,” Bender said.
Further, the Yenchis believe the trial court erred when it granted the appellees’ motions in limine that sought to preclude certain evidence related to the suitability of the insurance policy sold to the Yenchis. The trial court based its decision upon the prior dismissal of the Yenchis’ fiduciary claim.
“We have reversed the trial court’s decision regarding the Yenchis’ fiduciary duty claim. Accordingly, we vacate the court’s disposition of the appellees’ motions in limine as a clear error of law. Moreover, the exclusion of this evidence could have affected the verdict in the Yenchis’ trial of their fraudulent misrepresentation and UTPCPL claims,” Bender said. “Accordingly, absent legal support for its exclusion, we grant the Yenchis’ request for a new trial on these claims.”
But, Bender also wrote the trial court did not err in applying the pre-amended 1996 version of the UTPCPL to this case, since the Yenchis’ allegations of deceptive business impropriety all took place prior to August 1996.
“Their contention is without merit, and the pre-amended version of the UTPCPL controls,” Bender said. “For the above reasons, we reverse the summary judgment entered by the trial court in favor of appellees regarding the Yenchis’ claim for breach of fiduciary duty. Moreover, we vacate the judgment entered and remand for a new trial on their fraudulent misrepresentation and UTPCPL claims,” Bender said.
The appellants are represented by Kenneth R. Behrend of Pittsburgh and Mark T. Coulter of Monroeville.
The appellees are represented by Kathy Condo of Babst Calland Clements Zomnir, in Pittsburgh.
The Superior Court of Pennsylvania case 753 WDA 2014
From the Pennsylvania Record: Reach Courts Reporter Nicholas Malfitano at email@example.com