Toy v. Metropolitan Life Insurance

928 A.2d 186, 593 Pa. 20, 2007 Pa. LEXIS 1463
CourtSupreme Court of Pennsylvania
DecidedJuly 18, 2007
Docket33 & 34 WAP 2005
StatusPublished
Cited by321 cases

This text of 928 A.2d 186 (Toy v. Metropolitan Life Insurance) is published on Counsel Stack Legal Research, covering Supreme Court of Pennsylvania primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Toy v. Metropolitan Life Insurance, 928 A.2d 186, 593 Pa. 20, 2007 Pa. LEXIS 1463 (Pa. 2007).

Opinions

[24]*24 OPINION

Chief Justice CAPPY.

In this civil action, Appellant/Cross-Appellee Georgina Toy (“Toy”) brought several causes of action against Appellees/Cross-Appellants Metropolitan Life Insurance Company (“Metropolitan Life”) and one of its sales representatives, Bob Martini (“Martini”) (collectively, “Defendants”). We granted review to consider (1) the purview of the bad faith statute, 42 Pa.C.S. § 8371 (“ § 8371”); (2) whether justifiable reliance is an element of the claims Toy brought under the Unfair Trade Practices and Consumer Protection Law (“Consumer Protection Law”), 73 P.S. § 201-1 et seq.;1 and (3) whether Defendants were entitled to summary judgment on the grounds that Toy would be unable to establish the element of justifiable reliance at trial. For the following reasons, the Superior Court’s order is affirmed, though as a matter of statutory construction on Toy’s § 8371 claim.2

I.

A. Facts

The relevant record on summary judgment, based on Toy’s deposition testimony, is as follows.3 In February of 1992, Toy [25]*25was 42 years of age and working as a registered nurse, a position she had held for about twenty years. Toy and her husband owned a small business and their own home. Through her employment, Toy held a tax-sheltered annuity and a life insurance policy. Toy wanted to begin preparing for retirement. Toy’s husband, who was acquainted with Martini, arranged for a meeting between Martini and Toy so that they could discuss a product that Metropolitan Life offered. At their meeting, Martini presented Toy with information regarding the Metropolitan Life 50/50 Savings Plan. Martini explained that the plan was a savings vehicle and that if Toy were to make monthly payments of $50, the plan would generate a fund of approximately $100,000 when she reached sixty-five. Martini also informed Toy that life insurance went along with and was part of the plan. When Toy indicated to Martini that she was interested in the plan, he had her complete and execute an “Application for Life Insurance,” which asked a series of questions concerning lifestyle and health.

The following month, Toy received a policy of insurance (“Policy”) from Metropolitan Life. The cover sheet of the Policy had the following information written on it: “Metropolitan Life Insurance Company will pay the amount of insurance and provide the other benefits of this policy according to its provisions”; “Insured Georgina M. Toy”; “Face Amount of Insurance $31,544 as of Feb. 10, 1992”; “Policy Number 925 001 595 A;” “Plan Whole Life”; “Whole Life Policy”; “Life insurance payable when the insured dies”; “Premiums payable for a stated period”; and “Annual dividends.” The cover sheet also displayed a “10-Day Right to Examine Policy,” which stated:

[26]*26Please read this policy. You may return the policy to Metropolitan or to the sales representative through whom you bought it within 10 days from the date you receive it. If you return it within the 10-day period, the policy will be void from the beginning. We will refund any premium paid.

(Defendants’ Motion for Summary Judgment, Exhibit C.)

On page 4, the Policy set forth a guaranteed cash value at age 65 of $11,008.86 based on a guaranteed interest rate of 4% a year. On page 8, the Policy stated that “[tjhis policy includes any riders and, with the application attached when the policy is issued, makes up the entire contract.” The Policy also set forth a “Limitation on Sales Representative’s Authority,” providing that “[n]o sales representative or other person, except our President, Secretary, or a Vice-President may (a) make or change any contract of insurance; or (b) change or waive any terms of this policy. Any change must be in writing and signed by our President, Secretary or a Vice-President.” (Id.)

Toy looked at only the Policy’s cover sheet. Over time, Toy paid a total of $1,400 in premiums to Metropolitan Life. In 1994, Toy was notified of a Florida class action pending against Metropolitan Life, and became concerned that she had purchased life insurance from the Company. At that point, Toy stopped making premium payments, and the Policy lapsed.

B. Procedural History

Toy filed a Praecipe for Writ of Summons on November 1, 1995, a complaint on February 6, 1996, and an amended complaint (“Complaint”) on March 3, 1999 against Defendants. In her Complaint, Toy alleged that Defendants undertook a marketing scheme to disguise the true nature of the Policy and misrepresent it to be a savings or investment vehicle; that Defendants’ misrepresentations about the Policy led her to believe that she was investing in a savings plan; that due to Defendants’ misrepresentations she purchased life insurance she did not want; that Defendants’ misrepresentations prevented her from securing the type of retirement product she [27]*27needed; and that Defendants engaged in these practices because the premiums and administrative fees associated with life insurance were higher than those for annuities and similar retirement products. Based on these allegations, Toy set forth, inter alia, claims under the Consumer Protection Law against Defendants (Count III and Count IV),4 and a claim for bad faith under § 88715 against Metropolitan Life for engag[28]*28ing in activity that is unlawful under the Unfair Insurance Practices Act (“UIPA”), 40 P.S. § 1171.1 et seq. (Count VI).67

In the interval between the commencement of Toy’s action and the filing of her Complaint, the trial court made several rulings in one of the Cases, Ihnat v. Pover, 35 Pa.D. & C.4th [29]*29120 (Pa.Com.Pl.1997). These rulings were applied in all of the Cases, where relevant.8 One such ruling concerned the scope of the bad faith statute. The trial court ruled that bad faith under § 8371 was not, as Metropolitan Life argued, limited to allegations that an insurer refused to cover claims, but could be founded on allegations that the insurer did not satisfy a duty that the law imposed upon it in its relationship with its insured. Id. at 139-40. The trial court reasoned that § 8371 is written broadly; that the only restriction reflected in its language is that it does not reach conduct that is otherwise permissible to insurers under Pennsylvania law; that the court should not read a remedial statute narrowly; and that the Legislature was creating a comprehensive remedy for fraudulent conduct and violations of all UIPA provisions in enacting § 8371, and not merely responding to this Court’s refusal in D Ambrosio v. Pennsylvania National Mutual Casualty Ins. Co., 494 Pa. 501, 431 A.2d 966 (1981), to adopt the approach taken by the California Supreme Court in Gruenberg v. Aetna Ins. Co., 9 Cal.3d 566, 108 Cal.Rptr. 480, 510 P.2d 1032 (1973), and create a remedy for an insured who alleged that his insurer acted in bad faith in denying payment for a loss covered under the parties’ insurance contract. Ihnat, 35 Pa.D. & C.4th at 126-31.

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Bluebook (online)
928 A.2d 186, 593 Pa. 20, 2007 Pa. LEXIS 1463, Counsel Stack Legal Research, https://law.counselstack.com/opinion/toy-v-metropolitan-life-insurance-pa-2007.