No jury trial required on consumer protection claim

Fazio v. Guardian Life Ins. Co. of America, --- A.3d ----, 2012 WL 6177271 (Pa. Super.), 2012 PA Super 273

The Fazios appealed from a judgment against them after a nonjury trial. They argued that Guardian fraudulently sold them “vanishing” premium life insurance policies unsuited to their circumstances.  They had only claims for “deceptive or unfair” practices under the Pennsylvania Unfair Trade Practice and Consumer Protection Law, because their common law fraud, negligence and breach of fiduciary duty claims had been dismissed for being filed after the applicable statute of limitations had expired.

On appeal, the Fazios argued that they were entitled to a jury trial.  The court of appeals disagreed.  When a statute is silent on whether it affords a jury trial, the question is whether the cause of action existed when the Constitution was adoped, and, if so, whether there was a concomitant right to a jury trial.  The Fazios argued that the UTPCPL was the same as common-law fraud, for which a jury trial was available, because the legislature was supplementing existing common-law remedies and not creating new claims.  The UTPCPL has both broad and specific provisions, barring both “[c]ausing likelihood of confusion or of misunderstanding as to the source, sponsorship, approval or certification of goods or services” and failure to disclose that rustproofing is optional in new car sales.  The Fazios relied on the catchall clause prohibiting “any other fraudulent or deceptive conduct which creates a likelihood of confusion or of misunderstanding.”  “[O]r deceptive” was added by the legislature in 1996; the court concluded that it overturned earlier precedent requiring plaintiffs to prove the elements of common-law fraud.  The Pennsylvania Supreme Court had stated that the UTPCPL should be construed liberally, and recent cases to consider the issue had determined that the catchall provision no longer required fraud; otherwise the 1996 changes wouldn’t be meaningful.

Moreover, while the Fazios were required to prove fraud or deceptive conduct, they also needed to prove that this occurred in a consumer transaction to be covered by the UTPCPL.  “This additional burden takes the claim outside of the realm of common law fraud. The UTPCPL is to be construed broadly and was designed to protect consumers from unscrupulous business practices. Such a unique, statutory remedy was not available under the common law.”  The court was unwilling to graft a jury trial right onto this statutory cause of action.

Other challenges to the lower court’s ruling were also rejected.  The trial court accepted as credible the insurance rep’s testimony that he explained the truth about the insurance premiums to Mr. Fazio, including that dividend amounts weren’t guaranteed.  Further, the trial court found that the Fazios failed to prove that they couldn’t have gotten the advertised cash values if they’d continued to pay premiums.  Nor was it deceptive to use “vanishing premium,” a term not barred by Pennsylvania law at the time, or to refer to life insurance as functioning like a bank, given the other disclosures.  These findings were not an abuse of discretion.