Waronsky v. Ameriprise Fin., Inc.

245 A.3d 1062 (Table)

Dennis WARONSKY, Appellant v. AMERIPRISE FINANCIAL, INC., Ameriprise Financial Services, Inc., Riversource Life Insurance Company and Kenneth J. Rock

No. 412 WDA 2020

Superior Court of Pennsylvania.

Filed December 11, 2020

Reargument Denied February 18, 2021

MEMORANDUM BY MURRAY, J.:

Dennis Waronsky (Appellant) appeals from the judgment entered in favor of Ameriprise Financial, Inc., Ameriprise Financial Services, Inc., Riversource Life Insurance Company, and Kenneth J. Rock (Rock) (collectively, "Defendants"). The parties’ dispute concerns two "universal" life (UL) insurance policies that Defendants sold to Appellant in 1988 and 1994. After careful review, we affirm.

By means of background, UL insurance policies differ from standard whole life insurance policies. The major distinctions are that UL policies have an investment savings component and flexible premiums. These policies are comprised of the savings component and cost of insurance (COI). In sum, collected premium payments in excess of the COI accumulate within the cash/savings component. UL policyholders earn interest on the accumulated sums in the savings component, at a variable interest rate dependent on current market conditions. ¹ Importantly, however, UL policies also contain a specified "guaranteed" interest rate (guaranteed rate), which provides a floor on how low the interest rate can go. ² It is advantageous for UL policyholders to receive the highest guaranteed rate, as the rate increases the amount of cash that accumulates in the savings component of the policy.

Here, Appellant initially purchased a "Flexible Premium Adjustable" UL policy from Rock, an insurance agent employed by Defendants, in 1988 (1988 policy). This policy provided for a life insurance benefit of $100,000 (as well as other benefits to Appellant's wife not relevant to this appeal). Appellant paid a monthly premium of $100 for the policy. The guaranteed rate was 4.5% . Before the parties executed the policy documents, Rock showed Appellant a written illustration (1988 illustration), which contained hand-written explanatory notes by Rock. This was Rock's standard practice, which he did to inform Appellant of the details of the 1988 policy. Rock also presented Appellant with an individually tailored "Disclosure Statement" (1988 Disclosure Statement), which essentially detailed the same information as the 1988 illustration.

For the next several years, Appellant maintained the 1988 policy under the terms discussed above. In November 1993, Defendants sent an internal communication to all of their insurance sales agents located in Pennsylvania, including Rock. ³ This communication stated that the PID had authorized Defendants to reduce the guaranteed rate on all new sales of UL policies to 4% . The interest reduction applied to UL policies purchased after January 1, 1994 (the "1994 interest reduction").

On December 8, 1993 (1993 meeting), Appellant met with Rock to discuss a new UL insurance policy that Defendants had offered to Appellant to replace the 1988 policy. The new proposed policy would increase Appellant's death benefit from $100,000 to $150,000. During the 1993 meeting, Rock again showed Appellant a new written illustration, with hand-written notes, to inform Appellant of the details of the new proposed policy. This illustration stated that the guaranteed rate on the proposed policy at that time was 5% . Although no agreement was reached at the 1993 meeting, Rock and Appellant agreed to meet again to discuss the matter further.

On February 2, 1994, Appellant and Rock met again (1994 meeting), and executed the new UL policy (1994 policy), which increased Appellant's death benefit from $100,000 to $150,000, with the same monthly premium of $100. The accumulated cash in the 1988 policy savings account "rolled over" into the 1994 policy. This contract, like the 1988 policy, consisted of a written policy application and a Disclosure Statement (1994 Disclosure Statement).

The 1994 Disclosure Statement contained a blank section, which required Defendants to specify both the guaranteed rate and "Guaranteed Period of Coverage." Rock did not personally enter this information on the form; rather, his administrative assistant (Rock's assistant), did so by hand. The 1994 Disclosure Statement provided that the guaranteed rate was 5% , which was inconsistent with the 1994 interest reduction. In actuality, because Appellant had applied for the 1994 policy after January 1, 1994, he received a guaranteed rate of 4%, not 5%, pursuant to the 1994 interest reduction, since he applied for the 1994 policy after January 1, 1994. Further, Rock's assistant specified in the 1994 Disclosure Statement that the guaranteed period of Appellant's coverage was to age 95 . Notably, however, the 1988 Disclosure Statement stated that the guaranteed period of Appellant's coverage was to age 75 . After Appellant initiated this action, Defendants alleged that the above inconsistencies were not fraudulently made; rather, they were mere clerical errors by Rock's assistant.

After Defendants approved the executed 1994 policy, Rock sent Appellant a copy of the policy documents, including the 1994 Disclosure Statement. Appellant eventually received the documents in the mail, and filed them for safekeeping. ⁴ Aside from this mailing, Rock did not separately advise Appellant that the guaranteed rate of 4% he received under the 1994 policy differed from the guaranteed rate of 5% that Defendants represented Appellant would receive: (a) at the 1993 meeting; and (b) in the 1994 Disclosure Statement.

In 2004, Appellant surrendered the 1994 policy. At that time, Appellant had paid Defendants approximately $19,600 in premiums toward the 1988 and 1994 policies. When Appellant surrendered the 1994 policy, Defendants sent him a check for approximately $13,000, representing the cash value accumulated in the savings account component of the policy.

Appellant initiated this action on April 20, 2001 by writ of summons. Appellant filed a complaint several years later, in September 2008. Appellant alleged 3 causes of action: fraudulent misrepresentation (FM), negligent misrepresentation (NM), and violation of the Unfair Trade Practices and Consumer Protection Law (UTPCPL), 73 P.S. § 201-1, et seq.⁵ These claims pertained to the representations Defendants made as to: (a) the guaranteed rate of the 1994 policy Rock verbalized and illustrated at the 1993 meeting; and (b) the guaranteed period of insurance coverage set forth in the 1994 Disclosure Statement ( i.e. , age 95). We will collectively refer to these misrepresentations as the "1994 policy misrepresentations."

Appellant's claims of FM and NM were tried before a jury; simultaneously, his UTPCPL claim was tried before the trial court, acting as fact-finder. Trial commenced on April 30, 2019. On May 7, 2019, the jury found for Appellant on the NM claim, and found against Appellant on the FM claim. The jury awarded Appellant damages on the NM claim of approximately $2,700. On October 21, 2019, the trial court found for Defendants on the UTPCPL claim.

In the interim, on May 13, 2019, the trial court ordered the parties to file proposed findings of fact and conclusions of law within 45 days (the "proposed findings order"). Both parties timely complied.

On October 31, 2019, Appellant timely filed post-trial motions, which included a motion for a new trial, as well as a motion for judgment notwithstanding the verdict (JNOV) regarding the FM claim and the damages portion of the NM claim. Appellant also challenged the trial court's verdict against him on the UTPCPL claim and moved for a new trial. Defendants filed a response in opposition. The trial court denied Appellant's motions on March 12, 2020. Five days later, the prothonotary entered judgment on the respective verdicts.

Appellant filed a timely notice of appeal on March 18, 2020. The trial court did not order Appellant to file a concise statement of errors complained of on appeal pursuant to Pa.R.A.P. 1925(b), and no statement was filed. On June 23, 2020, the trial court issued a 3-page opinion.

Appellant presents six issues for our review:

1. Did the trial court err in finding there was no violation of the Unfair Trade Practices and Consumer Protection Law?

2. Was the trial court's nonjury verdict in favor of Defendant[s] on [Appellant's] UTPCPL claim against the weight of the evidence?

3. Was the jury's determination in favor of Defendant[s] on [Appellant's] fraudulent misrepresentation claim against the weight of the evidence?

4. Did the trial court err in finding that [Appellant] failed to prove that Defendants’ misrepresentations regarding the terms of the universal life policy were made either intentionally or with reckless disregard to their falsity?

5. Did the trial court err in denying [Appellant's] motion for a directed verdict and JNOV as to [Appellant's] fraudulent misrepresentation and negligent misrepresentation claims?

6. Did the trial court err by: (1) permitting Defendants to introduce evidence that they were entitled to an offset from [Appellant's] claimed damages; and (2) instructing the jury that they may deduct from [Appellant's] claimed damages an offset amount based upon the alleged "value" of the insurance coverage?

Appellant's Brief at 6 (issues renumbered, some capitalization omitted). ⁶

Appellant first argues that the trial court's verdict on his UTPCPL claim was against the weight of the evidence and must be overturned. See Appellant's Brief at 61-71. After care review, we disagree.

The UTPCPL is Pennsylvania's consumer protection law; it provides a private right of action for anyone who "suffers any ascertainable loss of money or property" attributable to an unlawful method, act or practice. 73 P.S. § 201-9.2(a) ; see also Richards v. Ameriprise Fin., Inc. , 152 A.3d 1027, 1035 (Pa. Super. 2016). It was created to prevent "[u]nfair methods of...