The Pennsylvania Supreme Court is set to consider whether the catchall provision of the Pennsylvania Unfair Trade Practices and Consumer Protection Law requires plaintiffs to prove negligent or fraudulent misrepresentation.

Counsel for the plaintiffs said the allocatur grant gives the justices an opportunity to clear up a question that courts and litigants have struggled with for decades: What is the definition of “deceptive conduct” in the 1996 amendment to the UTPCPL?

The Pennsylvania Superior Court held last October that the protections of the UTPCPL extended to plaintiffs Gary and Mary Gregg in their lawsuit against Ameriprise and related entities, upholding an Allegheny County trial judge's ruling.

In doing so, the appeals court said the 1996 amendment to the UTPCPL eliminated the requirement that plaintiffs prove negligence or intent to deceive and thus “imposed strict liability on vendors who deceive consumers by creating a likelihood of confusion or misunderstanding in private, as well as public, causes of actions.”

Ameriprise argued on appeal that defense verdicts delivered by the jury on the Greggs' misrepresentation and fraud tort claims necessitated the dismissal of their UTPCPL claim, but Superior Court Judge Deborah Kunselman disagreed.

“Carelessness or intent, required for negligent or fraudulent misrepresentations, may be absent when perpetrating 'deceptive conduct' under 73 P.S. Section 201-2(4)(xxi),” Kunselman wrote for a three-judge panel that also included Judge Paula Francisco Ott and Senior Judge John Musmanno. “Given their varying degrees of requisite intent, a UTPCPL catchall violation and the torts of negligent and fraudulent misrepresentation raise separate legal issues, as a matter of law.”

At trial, the judge found that an Ameriprise agent duped the Greggs into obtaining certain life insurance policies that were to their financial detriment, and awarded them $52,000.

The Superior Court upheld that determination.

“This court finds that [the insurance companies'] conduct created a likelihood of confusion or misunderstanding in their dealings with the [Greggs],” Kunselman said. ”Even if the financial advisor did not directly misrepresent the cost of the life insurance policy, he failed to clearly and fully explain the cost and terms of the policy; and the [Greggs] reasonably believed they would not have to pay additional monies to fund the policy once their existing policies were transferred to the [insurance companies].”

Kunselman added that UTPCPL violations are “not amenable to excuses.”

“The UTPCPL is for consumer protection. It undoes the ills of sharp business dealings by vendors, who, as here, may be counseling consumers in very private, highly technical concerns,” Kunselman said. “Like the Greggs, those consumers may be especially reliant upon a vendor's specialized skill, training, and experience in matters with which consumers have little or no expertise. Therefore, the legislature has placed the duty of UTPCPL compliance squarely and solely on vendors; they are not to engage in deceitful conduct and have no legally cognizable excuse, if they do.”

The Superior Court also refused to mitigate the damages against Ameriprise. Kunselman said the insurance company's reliance on the Restatement (Third) of Torts for damage calculations was flawed.

“The statutory language of the UTPCPL governs this UTPCPL claim. Thus, the insurance companies' reliance upon the Restatement (Third) of Restitution—i.e., a treatise on common law—is obviously misplaced. The trial judge properly grounded his award in the statutory remedies that our General Assembly enacted within the UTPCPL,” Kunselman said.

In its one-page June 27 order, the Pennsylvania Supreme Court agreed to consider a single issue on appeal: “Whether the Superior Court improperly held that a strict liability standard applies to a claim under the 'catch-all' provision of the Pennsylvania Unfair Trade Practices and Consumer Protection Law, 73 P.S. Sections 201-1 et seq., as amended in 1996, even though the provision expressly requires proof of 'fraudulent or deceptive conduct.'”

Kathy Condo of Babst, Calland, Clements and Zomnir in Pittsburgh represents the defendants and she and her clients were happy the court had granted their appeal.

Kenneth Behrend in Pittsburgh represents the plaintiffs.

“The Supreme Court taking the appeal provides the opportunity for the court to address this important issue of whether the statute should be interpreted as a strict liability statute,” he said.