Richards v. Ameriprise Fin., Inc.

152 A.3d 1027

Rita M. RICHARDS and Caroline J. Richards, Co–Executrices of the Estate of 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

Rita M. Richards and Caroline J. Richards, Co–Executrices of the Estate of 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. 265 WDA 2015

No. 307 WDA 2015

Superior Court of Pennsylvania.

Argued April 26, 2016

FILED DECEMBER 16, 2016

Reargument Denied February 13, 2017

Kathy Condo, Pittsburgh, for Ameriprise Financial Inc., Ameriprise Financial Services, Bouchard and Riversource.

Kenneth R. Behrend, Pittsburgh, for Richards, H.

Rudolph L. Massa, Pittsburgh, for Richards, C., Richards, J. and Richards, M.

BEFORE: GANTMAN, P.J., BENDER, P.J.E., and PANELLA, J.

OPINION BY PANELLA, J.:

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 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 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 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' 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, 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?

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

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