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Richards v. Ameriprise Financial, Inc.

Superior Court of Pennsylvania

August 21, 2019

RITA M. RICHARDS AND CAROLINE J. RICHARDS, CO-EXECUTRICES OF THE ESTATE OF JAMES G. RICHARDS, AND 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 OFTHE ESTATE OF JAMES G. RICHARDS AND HELEN RICHARDS
v.
AMERIPRISE FINANCIAL, INC., AMERPRISE 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 HELEN RICHARDS
v.
AMERIPRISE FINANCIAL, INC., AMERIPRISE FINANCIAL SERVICES, INC., RIVERSOURCE LIFE INSURANCE COMPANY, AND THOMAS A. BOUCHARD AppellantsRITA M. RICHARDS AND CAROLINE J. RICHARDS, CO-EXECUTRICIES OF THE ESTATE OF JAMES G. RICHARDS AND HELEN RICHARDS
v.
AMERIPRISE FINANCIAL, INC., AMERIPRISE FINANCIAL SERVICES, INC., RIVERSOURCE LIFE INSURANCE COMPANY AND THOMAS A. BOUCHARD Appellants

          Appeal from the Order October 17, 2017 In the Court of Common Pleas of Allegheny County Civil Division at No(s): G.D. 01-006614

          Appeal from the Order Entered February 15, 2018 In the Court of Common Pleas of Allegheny County Civil Division at No(s): GD-01-006614

          Appeal from the Order Dated March 20, 2018 In the Court of Common Pleas of Allegheny County Civil Division at No(s): GD 01-006614

          Appeal from the Judgment Entered May 8, 2018 In the Court of Common Pleas of Allegheny County Civil Division at No(s): G.D. 01-006614

          BEFORE: BOWES, J., SHOGAN, J., and STRASSBURGER [*] J.

          OPINION

          BOWES, J.

         Before us are four appeals of Ameriprise Financial, Inc., Ameriprise Financial Services, Inc., Riversource Life Insurance Company, and Thomas A. Bouchard (collectively "Ameriprise"), from judgment and orders entered by the Court of Common Pleas of Allegheny County, following remand from this Court with directions to the trial court to recalculate damages after we vacated its award of punitive damages. See Richards v. Ameriprise Fin., Inc., 152 A.3d 1027 (Pa.Super. 2016) (Richards I).[1] The appeals have been consolidated for our review. We affirm the judgment in part, and reverse it in part. The order dated October 17, 2017, which amended the verdict and judgment, is affirmed in part and reversed in part. The orders awarding appellate and post-appeal attorney fees are vacated, and the case is remanded for further proceedings consistent herewith.

         We briefly summarize the underlying action. In 1994, Plaintiffs' decedent James G. Richards and Helen Richards retained Richard Bouchard, a representative of IDS Insurance, the predecessor to Ameriprise, as their financial advisor. Mr. Bouchard induced the couple to purchase a $100, 000 universal life insurance policy to avoid a reduction in income should Mr. Richards die first. Mr. Bouchard represented that annual premiums for the life of the policy would remain level at $6, 000, payable at the rate of $500 per month. Based on those representations, the Richards applied for the policy and Ameriprise accepted their application. The application, as well as the policy they subsequently received, was consistent with the information provided by Mr. Bouchard.

         In 2000, Mr. Bouchard advised Mr. Richards that a $15, 053.59 prepayment in excess of the $500 monthly premium was needed to avoid lapse of the policy. The Richards complied, and continued to pay $500 per month until Mr. Richards's death on February 20, 2005. Upon Mr. Richards's death, Ameriprise paid the $100, 000 death benefit to Mrs. Richards.

         Plaintiffs initiated this action against Ameriprise by writ of summons in 2001, and a complaint was filed on July 30, 2008.[2] They sought damages for negligent and fraudulent misrepresentation, breach of fiduciary duty, negligent supervision, and violation of the Unfair Trade Practice and Consumer Protection Law ("UTPCPL"), 73 P.S. § 201-9.2, arising from the 1994 sale of the universal life insurance policy. The damages consisted of the $15, 053.59 lump sum payment made in 2000 to prevent the policy from lapsing, but which was contrary to the terms of its purchase.

         The claims for breach of fiduciary duty and negligent supervision were dismissed at summary judgment. The remaining misrepresentation and UTPCPL claims were tried non-jury for three days in November 2014.[3] The court entered a verdict in favor of Plaintiffs solely on the UTPCPL claim and calculated actual damages at $15, 053.59 plus interest, for a total of $34, 006.44, awarded treble damages of $102, 019.32, and punitive damages in the amount of $50, 000.[4] As directed, Plaintiffs' counsel submitted a petition for attorney fees and costs pursuant to § 201.9-2 of the UTPCPL. Thereafter, the trial court awarded $84, 072.50 in attorney fees and $1, 759.58 in costs to the law firm of Behrend and Ernsberger, and $26, 840 in attorney fees for Massa Law Group.

         Ameriprise appealed, and thereafter, on March 9, 2015, filed a praecipe for judgment on the verdict in the amount of $264, 691.40. The judgment reflected the award of treble damages of $102, 019.32, punitive damages of $50, 000, and attorney fees and costs totaling $112, 672.08. It did not include $34, 006.44 indicated on the verdict slip for the actual loss sustained. Plaintiffs filed a motion to correct the judgment on April 15, 2015, averring that the amount of the judgment should be corrected to include the $34, 006.44 in addition to treble damages of $102, 019.32, for a total of $136, 025.76 in liability damages. The trial court denied the motion on April 15, 2015, without explanation.

         This Court subsequently reversed the award of punitive damages, affirmed the remainder of the judgment, and remanded the case to the trial court with the direction to recalculate the damages excluding the $50, 000 punitive damages award. Richards I. Ameriprise sought allocatur from the Supreme Court, but its petition was denied. Richards v. Ameriprise Fin., Inc., 170 A.3d 992 (Pa. 2017).

         On remand, Plaintiffs filed a pleading styled as a "Motion to Amend the Verdict to Conform to the Superior Court's Published Opinion Dated December 16, 2016." Plaintiffs averred therein that, "pursuant to" this Court's memorandum, the verdict should be "recalculated to include," inter alia, "$34, 006.44 in restitution." In support thereof, Plaintiffs attached as an exhibit the last page of our Opinion concluding that the attorney fees were proportionate to the damages, and referencing Plaintiffs' receipt of "$34, 006.44 in restitution and $102, 019.32 in treble damages as a result of counsels' services in the face of corporate adversaries with greater resources than [Plaintiffs], and counsel did so on a contingent basis for approximately thirteen years." Richards I, supra at 1039.

         The trial court granted Plaintiffs' motion and amended the November 13, 2014 jury verdict and judgment to award $34, 006.44 in restitution damages in addition to treble damages, increasing the award of liability damages to $136, 025.76. Order, 10/17/17. The court also subtracted the $50, 000 punitive damage award. Id. Ameriprise's timely appeal from the order amending the verdict and judgment was docketed at 1719 WDA 2017.

         On November 22, 2017, Plaintiffs filed a second petition seeking counsel fees and costs for work performed from December 2014 through November 2017, which included the first appeal and preparation of the second fee petition. Plaintiffs' Attorney Kenneth Behrend, whose hourly rate had previously been approved at $400, sought fees at the rate of $600 per hour. The rates of his associate, Kevin Miller, Esquire, and Attorney Rudolph Massa, formerly $275 per hour, were increased to $500 per hour. Paralegal Donna Lonzo's hourly rate, formerly $125 per hour, was increased to $190 per hour. Thus, all hourly rates reflected a substantial increase in the rates approved by the trial court for bringing the case to trial, which this Court affirmed on appeal. See Richards I, supra. Plaintiffs' second petition sought attorney fees of $153, 172 for the Behrend Law Firm, which included a $51, 000 fee solely for preparation of the second fee petition itself, $2, 800 for the Massa Law Group, and a $12, 000 charge for preparation of a petition to publish.

         In support of the reasonableness of Mr. Behrend's $600 hourly rate, Plaintiffs offered affidavits or certifications from six attorneys located throughout the Commonwealth who regularly performed fee-shifting work; bar fee surveys; and contemporaneously-maintained time records. Ameriprise filed a motion to strike the petition, which the trial court denied on December 19, 2017. After a hearing, the court granted Plaintiffs' fee petition in its entirety, awarding $153, 172 to Behrend and Ernsberger, $2, 800 to Massa, Butler and Giglione, and $789 in costs. Order, 2/13/18. Ameriprise timely appealed, complied with Pa.R.A.P. 1925(b), and the appeal was docketed at 354 WDA 2018.

         On March 20, 2018, Plaintiffs filed a third fee petition seeking counsel fees and costs in conjunction with the filing of their response to Ameriprise's objections to the second fee petition and a hearing thereon. Ameriprise objected to the petition, but the trial court granted Plaintiffs' third fee petition in its entirety, awarding an additional $38, 934 in fees to Attorney Behrend, $4, 650 to Attorney Massa, and $17.90 in costs. Ameriprise's appeal was docketed at No. 557 WDA 2018.

         On May 8, 2018, judgment was entered on the amended verdict in favor of Plaintiffs in the amount of $234, 369.34. Ameriprise's appeal from the judgment was docketed at 764 WDA 2018.

         Ameriprise presents two issues for our review:

1. Whether the trial court erred on remand by awarding quadruple damages under the UTPCPL?
2. Whether the trial court erred on remand in its awards of attorneys' fees under the UTPCPL for work on appeal, which awards included a 50% to 80% increase in counsel's hourly rate from the rates charged for the trial, included significant fees for seeking counsel fees and other work unrelated to the UTPCPL claim, and resulted in a total award of $331, 480.90 in attorneys' fees for a claim for the return of a $15, 000 premium payment?

Appellants' brief at 4.

         We begin with the applicable legal principles that inform our review. The role of an appellate court in reviewing the trial court's decision in a non-jury trial is

to determine whether the findings of the trial court are supported by competent evidence and whether the trial court committed error in any application of the law. The findings of fact of the trial judge must be given the same weight and effect on appeal as the verdict of a jury. We consider the evidence in a light most favorable to the verdict winner. We will reverse the trial court only if its findings of fact are not supported by competent evidence in the record or if its findings are premised on an error of law. However, where the issue . . . concerns a question of law, our scope of review is plenary.

Richards I, supra at 1034.

         Plaintiffs' first issue involves statutory interpretation of the UTPCPL, which is a legal question. Thus, "our scope of review is plenary, and our standard of review is de novo." Gregg v. Ameriprise Fin., Inc., 195 A.3d 930, 940 (Pa.Super. 2018).

         The pertinent statutory provision is contained in the UTPCPL, 73 P.S. § 201-9.2, "Private actions," which provides in relevant part:

(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 P.S. § 201-9.2(a) (emphasis added).

         Ameriprise contends, based upon the foregoing statutory language, that the trial court erred in amending the verdict and judgment upon remand to award both actual damages in the amount of $32, 006.44 plus treble damages calculated by multiplying the actual damages times three. Ameriprise argues that the trial court effectively awarded quadruple damages in violation of the UTPCPL. In its memorandum, the trial court opined that Ameriprise waived this claim when it did not litigate this alleged error in the first appeal. Memorandum in Lieu of Opinion, 2/15/18, at unnumbered 3. For the reasons that follow, we find no waiver.

         The record reveals the following. The original judgment entered on the praecipe filed by Ameriprise consisted of $102, 019.32 in treble damages under the UTPCPL, computed by multiplying the actual loss of $34, 006.44 times three; punitive damages of $50, 000; attorney fees of $84, 072.50 for attorney Behrend's law firm and $26, 840 for Massa Law Group; and $1, 759.58 in costs. The total amount of the judgment entered on the verdict was $264, 691.40. Plaintiffs filed a motion to correct the amount of the judgment and verdict, arguing that Ameriprise made a clerical error in failing to include $34, 006.44, in addition to treble damages of $102, 019.32, for a total of $136, 025.76 in liability damages. By order dated April ...


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