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Ross E. Fazio and Joan L. Fazio v. the Guardian Life Insurance Company of America

December 12, 2012


Appeal from the Judgment Entered on August 3, 2011 In the Court of Common Pleas of Allegheny County Civil Division at No(s): GD 01-11241.

The opinion of the court was delivered by: Olson, J.:



Appellants, Ross E. Fazio and Joan L. Fazio (the Fazios), appeal from the judgment entered on August 3, 2011 in favor of Appellees, The Guardian Life Insurance Company of America (Guardian Life), Luttner Financial Group, Mark C. Donato, and Paul Shovel (hereinafter, collectively Guardian). Upon careful consideration, we affirm.

The trial court summarized the facts of this case as follows:

In February 1994, Mr. Donato met with Mr. Fazio in Mr. Fazio's home, completed a questionnaire on Mr. Fazio's assets, debts and income and showed Mr. Fazio an illustration with $12,000[.00] per year payments into a Guardian [Life] whole life insurance policy. Mr. Fazio purchased a life insurance policy in the face amount of $838,711 that required payments of $12,000[.00] per year over the next thirty-five years. Mr. Donato had similar meetings with Mr. Fazio in Mr. Fazio's home during the spring and summer of 1994, 1995, 1996, and 1997 and sold Mr. Fazio two additional Guardian [Life] policies insuring his life, three Guardian [Life] policies insuring the life of his wife, [] Joan Fazio, and three Guardian [Life] policies insuring the lives of each of their three children. The total face amount of the three policies on Mr. Fazio's life was $3,766,086[.00], the total of the three on Ms. Fazio's life was $3,562,026[.00] and the face amounts of the children's policies were $255,689[.00], $292,804[.00], and $350,944[.00].

During the summer of 1998, Mr. Fazio began meeting with a new investment advisor named Joseph Scarpo. At that time, Mr. Fazio's business was continuing to grow and his annual personal income had increased to over $1 million. It was Mr. Scarpo's opinion that Mr. Fazio should have less expensive term life insurance and put the funds he could save by eliminating the Guardian [Life] whole life payments into investments such as bonds or mutual funds. Mr. Scarpo referred Mr. Fazio to [A]attorney Gregory Moore. In 1999, Mr. Fazio took [A]attorney Moore's advice and stopped paying Guardian [Life], and [A]attorney Moore wrote a letter to Guardian [Life] alleging the Fazios had been deceived and demanding a refund of all premium payments received from them.

In June of 2001, the Fazios commenced the subject litigation by filing a [p]raecipe for [w]rit of [s]ummons. For the next nine and a half years, the docket indicates that disputes concerning pleadings, discovery and summary judgment motions were primarily handled by the Honorable R. Stanton Wettick, Jr. The Fazios requested a jury trial in January of 2010, but Judge Wettick ruled they were not entitled to a trial by jury. The case was then assigned to [the Honorable Alan Hertzberg] for the non-jury trial[.]

Trial Court Opinion, 11/2/2011, at 4-5.

The trial court more specifically described the subsequent procedural history as follows:

In January of 2011, [the trial court] presided over a nine day non-jury trial in which the Fazios attempted to prove that from 1994 to 1997, [] Mark Donato misled them into purchasing nine Guardian [Life] life insurance policies. The Fazios could only claim [Guardian] was liable for "deceptive or unfair" conduct as it is defined in the Pennsylvania Unfair Trade Practice and Consumer Protection Law (73 P.S. §§ 201-1, et seq.), since the Fazios common law fraud, negligence and breach of fiduciary duty claims were dismissed for being filed after the applicable statute of limitations had expired. Following the trial, [the trial court] determined that the Fazios had not proven their case by a preponderance of the evidence and [the] verdict was, therefore, that [Guardian was] not liable.

Id. at 1-2 (record citation omitted).

Thereafter, the Fazios filed a timely motion for post-trial relief. Following argument, the trial court denied the motion on July 25, 2011. This timely appeal followed.*fn2

The Fazios present the following issues for our review:

1. The [t]rial [c]court's determination that [the Fazios] were not entitled to a jury trial on their claims under the Unfair Trade Practices and Consumer Protection Law was reversible error.

2. The [t]rial [c]court erred in precluding testimony by Gregory Moore regarding observations he made in 1998 about the sales to the Fazios.

3. The [t]rial [c]court's findings that [Guardian] did not violate the Pennsylvania Unfair Trade Practices and Consumer Protection Law [are both legally erroneous] and against the weight of the evidence.

3.a. the credible evidence demonstrates that [Guardian] misrepresented the future financial performance of the life insurance policies as retirement plans

3.b. the credible evidence demonstrates that [Guardian] misrepresented the costs and products they were selling to [the] Fazio[s]

3.c. the credible evidence demonstrates that the sales presentations lead to the likelihood of confusion and misunderstanding and/or it was deceptive to use a sales illustration that shows the premium, which is referred to as the "annual outlay," to vanish at age 60, when payments of premiums are required through age 69

3.d. the credible evidence demonstrates that [Mr.] Donato's representations that [Mr.] Fazio was making "deposits" into the life insurance policies was a material misrepresentation

4. The [t]rial [c]court erred in determining that [Mr.] Fazio was not justified in relying upon the representations made by [Mr.] Donato.

Fazios' Brief at 3.*fn3

In their first issue presented, the Fazios argue that they had a right to a jury trial on their Unfair Trade Practices and Consumer Protection Law (UTPCPL) claims. Id. at 16. The Fazios concede that the plain language of the UTPCPL is silent regarding the right to a jury trial. Id. at 17.

The Fazios' first claim involves statutory interpretation and our scope and standard of review is well-settled:

[I]ssues involv[ing] statutory interpretation, raise a question of law, and are subject to de novo and plenary review. Generally, with respect to statutes, the object of all interpretation and construction is to ascertain and effectuate the intention of the General Assembly. Because the legislature is presumed to have intended to avoid mere surplusage, every word, sentence, and provision of a statute must be given effect. Where words of a later statute differ from those of a previous one on the same subject, they presumably are intended to have a different construction. We may also assume the legislature does not intend a result that is absurd, unreasonable, or impossible of execution.

Bennett v. A.T. Masterpiece Homes at Broadsprings, LLC, 40 A.3d 145, 151 (Pa. Super. 2012) (internal citations and quotations omitted). Here, 73 P.S. § 201-9.2 provides for a private cause of action under the UTPCPL:

(a) Any person who purchases or leases goods or services primarily for personal, family or household purposes and thereby suffers any ascertainable loss of money or property, real or personal, as a result of the use or employment by any person of a method, act or practice declared unlawful by section 3 of this act, may bring a private action to recover actual damages or one hundred dollars ($100), whichever is greater. The court may, in its discretion, award up to three times the actual damages sustained, but not less than one hundred dollars ($100), and may provide such additional relief as it deems necessary or proper. The court may award to the plaintiff, in addition to other relief provided in this section, costs and reasonable attorney fees.

73 Pa.C.S.A. § 201-9.2 (footnote omitted).

As the Fazios acknowledge, the statute does not specify that a jury trial is available. The statute delineates that only the court may award damages, costs, and fees. However, the Fazios argue that the statutory language of the UTPCPL makes specific reference to the court's ability to award non-common law remedies such as treble damages and, therefore, could have specifically delineated that only bench trials were available under it. Fazios' Brief at 24. Citing our decision in Sewak v. Lokhart, 699 A.2d 755 (Pa. Super. 1997), the Fazios contend that a jury may determine whether a UTPCPL violation occurred and an award of damages is warranted, and then the trial court decides whether treble damages are appropriate.*fn4 Id. at 29-30.

When examining a statute to determine if there is a right to a jury trial, we find guidance from the Pennsylvania Supreme Court's decision in Mishoe v. Erie Ins. Co., 824 A.2d 1153 (Pa. 2003). In that case, our Supreme Court granted allocatur to determine whether there was a right to a jury trial in a bad faith insurance action pursuant to 42 Pa.C.S.A. § 8371. Section 8371 provides, "[i]n an action arising under an insurance policy, if the court finds that the insurer has acted in bad faith toward the insured, the court may" award interest, punitive damages, and court costs and fees.

42 Pa.C.S.A. § 8371 (emphasis added). The Mishoe Court noted that the bad faith statute was silent regarding the right to a jury trial, but the legislature precisely chose to use the term "court" rather than "jury."

Mishoe, 824 A.2d at 273-274. Moreover, the Mishoe Court, determined that a cause of action for bad faith on the part of an insurer did not exist at common law or prior ...

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