APPEAL FROM THE ORDER ENTERED APRIL 4, 1985 IN THE COURT OF COMMON PLEAS OF ALLEGHENY COUNTY, CIVIL NO. GD - 84-22065
Frank M. Gianola, Pittsburgh, for appellants (at 866) and appellees (at 865).
Kenneth R. Behrend, Pittsburgh, for appellants (at 865) and appellees (at 866).
Cirillo, President Judge, and Del Sole and Beck, JJ.
[ 355 Pa. Super. Page 278]
This cross-appeal presents two questions for our determination: (1) whether the enactment of the Unfair Insurance Practices Act (UIPA)*fn1 bars an insured from pursuing a private cause of action against his insurer based upon a theory of common law fraud and deceit; and (2) whether the enactment of UIPA bars an insured from pursuing a private cause of action against his insurer based on the provisions of the Unfair Trade Practices Consumer Protection Law (CPL).*fn2
[ 355 Pa. Super. Page 279]
The insureds, Karin and Frank Pekular, instituted the present action by filing a three-count complaint against James H. Eich and his employer, State Farm Insurance Company. In their complaint, the Pekulars averred that State Farm, through its agent, Mr. Eich, sold Mr. Pekular four policies of automobile insurance. Mr. Pekular was allegedly advised by Mr. Eich that the Pekulars could save money through reduced premiums by electing to make the No-Fault health benefits available under the policies secondary to Blue Cross/Blue Shield or other health benefits. According to the Pekulars, Mr. Eich knowingly and purposefully did not explain that such an election would effectively reduce the total amount of primary health benefits that the Pekulars could claim in the event they were injured in an accident. The Pekulars claimed that they relied upon the "representations" and "inducements" of Mr. Eich that they could "save money" and elected to have the No-Fault benefits designated as secondary coverage. Mrs. Pekular later allegedly suffered serious and permanent injuries while driving a vehicle insured pursuant to one of the State Farm policies. She was subsequently denied payments which would have been forthcoming had the Pekulars not elected to designate the No-Fault benefits as secondary.
Counts I and II of the complaint alleged common law fraud and deceit against Mr. Eich and State Farm respectively and demanded compensatory and punitive damages. Count III alleged violations of Pennsylvania's Unfair Trade Practices Consumer Protection Law and demanded compensatory damages. The trial court dismissed preliminary objections to counts I and II and sustained preliminary objections as to count III. This Court granted permission to file immediate appeals, and both parties appealed.
In passing upon preliminary objections which are denied by the trial court, a reviewing court is required to accept as true the averments of fact in the complaint. Martino v. Transport Workers Union of Philadelphia Local 234, 301 Pa. Super. 161, 447 A.2d 292 (1982). With respect to preliminary objections which are sustained by the trial court:
[ 355 Pa. Super. Page 280]
In determining whether the lower court properly dismissed the complaint, we must take as true 'every well pleaded material fact set forth in the pleading . . ., as well as the inferences reasonably deducible therefrom.' Schott v. Westinghouse Electric Corp., 436 Pa. 279, 282, 259 A.2d 443, 445 (1969). Furthermore, we must bear in mind
the rule that preliminary objections should be sustained and a complaint dismissed only in cases which are clear and free from doubt. Legman v. Scranton School District, 432 Pa. 342, 247 A.2d 566 (1968); Todd v. Skelly, 384 Pa. 423, 120 A.2d 906 (1956); Gardner v. Allegheny County, 382 Pa. 88, 114 A.2d 491 (1955). To sustain preliminary objections in the nature of a demurrer, it must appear with certainty that, upon the facts averred, the law will not permit recovery by the plaintiff. Where any doubt exists as to whether or not the preliminary objections should be sustained, that doubt should be resolved by refusing to sustain the objections. Birl v. Philadelphia Electric Co., 402 Pa. 297, 167 A.2d 472 (1960); Sun Ray Drug Co. v. Lawler, 366 Pa. 571, 79 A.2d 262 (1951). Id., 436 Pa. at 291, 259 A.2d at 449.
Harkins v. Zamichieli, 266 Pa. Super. 401, 404-05, 405 A.2d 495, 497 (1979).
The UIPA represents a broad and sweeping effort by our Legislature to curb unfair or deceptive practices in the insurance industry. The purpose of the Act is set forth in section 2, which provides:
The purpose of this act is to regulate trade practices in the business of insurance in accordance with the intent of congress as expressed in the act of Congress on March 9, 1945 (Public Law 15, 79th Congress), by defining or providing for the determination of all such practices in this state which constitute unfair methods of competition
[ 355 Pa. Super. Page 281]
or unfair or deceptive acts or practices and by prohibiting the trade practices so defined or determined.
Act of July 22, 1974, P.L. 589, 40 P.S. § 1171.2 (Supp.1985) (footnote omitted). Section 4 of the Act provides:
No person shall engage in this state in any trade practice which is defined or determined to be an unfair method of competition or an unfair or deceptive act or practice in the business of insurance pursuant to this act.
40 P.S. 1171.4. Section 5 of the Act, 40 P.S. § 1171.5, in relevant part, defines "unfair methods of competition" and "unfair or deceptive acts" to include:
(1) Making, publishing, issuing or circulating any estimate, illustration, circular, statement, sales ...