High Court to Mull Requirements of Unfair Trade Practices Claim
The Supreme Court has agreed to hear arguments over whether the Unfair Trade Practices and Consumer Protection Law can be applied to allegedly inflated charges that a rental car company levied against a driver for damages to a vehicle.
On Jan. 30, the high court agreed to consider whether a driver will need to allege and prove justifiable reliance claims to pursue a cause of action under the UTPCPL's catch-all provision. The court will also hear whether the driver hiring an attorney to fight the allegedly excessive charges satisfies the law's "ascertainable loss" requirement.
In March 2013, a three-judge panel of the state Superior Court had determined that the plaintiff's claim in Grimes v. Enterprise Leasing Co. of Philadelphia was actionable under the UTPCPL because it was covered under the law's catch-all provision and satisfied the ascertainable-loss requirement. The holding reversed the trial court's decision to toss the plaintiff's claims.
Judge Sallie Updyke Mundy, writing the majority opinion, said that case law and the deterrent value of the UTPCPL swayed the court's decision.
"In our view, these allegations plainly meet the UTPCPL catch-all provision's requirement of 'fraudulent or deceptive conduct which creates a likelihood of confusion or of misunderstanding,'" Mundy said, quoting the UTPCPL. "Given the instruction from our Supreme Court that courts are to liberally construe the UPTCPL in order to effect the legislative goal of consumer protection and the facts of this case, we conclude the element of loss has been clearly established."
Judge Paula Francisco Ott joined the opinion and Judge William H. Platt concurred in the result.
James C. Haggerty of Haggerty, Goldberg, Schleifer & Kupersmith, who represented the plaintiff, said the issue of whether the UTPCPL catch-all requires plaintiffs to allege and prove justifiable reliance claims has been an open question since the catch-all provision was amended in 1996.
"We welcome the opportunity for the Supreme Court to clarify the issue, and we're hopeful of prevailing, just as we did before the Superior Court," Haggerty said.
According to Mundy, in December 2010, plaintiff Christina Grimes rented a vehicle from Enterprise Leasing and agreed that if the vehicle was damaged during the rental period she would pay for repairs, loss of use, diminution of value and administrative costs.
She returned the vehicle with a 10- to 12-inch scratch along the body, and was notified by Enterprise that the total costs would be $840. Four months later, Grimes then filed a counterclaim alleging that deceptively inflated fees fell into the UTPCPL's catch-all provision and that the legal fees she incurred to fight the charges constituted ascertainable loss.
Enterprise then filed to discontinue its claims, and stipulated that no further claims against Grimes would be pursued. The company also filed a motion for judgment on Grimes' pleadings.
The trial court granted Enterprise's pleadings, holding that Grimes had not pled wrongful conduct or any ascertainable loss, had not alleged a misrepresentation with respect to the disputed fees and had not suffered any losses.
Grimes appealed the decision, arguing that the alleged false statements fell within the catch-all provisions of the UTPCPL. To support her claim, she further contended that Enterprise knew of the alleged falsity of the claims, that the company threatened to contact her insurance carrier and credit card holder to obtain the payments, and that she incurred costs and fees associated with asserting her right to protect herself against the action.
In examining the argument that the claims fell under the UTPCPL catch-all, Mundy noted that the state Supreme Court has said the courts should liberally interpret the law to protect consumers. She further noted the Superior Court's 2012 decision in Bennett v. A.T. Masterpiece Homes at Broadsprings, which held that deceptive conduct that creates the likelihood of confusion or misunderstanding can constitute a cognizable claim under the UTPCPL.
Mundy further said that the court's 2005 decision in Agliori v. Metropolitan Life Insurance and the U.S. District Court for the Eastern District of Pennsylvania's 2011 decision in Jarzyna v. Home Properties were persuasive regarding the ascertainable-loss claims.
In Agliori, a plaintiff claimed that MetLife deceptively persuaded a decedent to surrender three whole life insurance policies in order to purchase a single universal life insurance policy. The trial court dismissed the case because the decedent received the amount of coverage he thought he'd purchased and he never paid higher than agreed to premiums, so therefore he was unable to show ascertainable damages. However, the Superior Court overruled the trial court, saying that the ruling obviated the UTPCPL's purpose because it diminished the deterrent value of the law.
The Eastern District in Jarzyna concluded that a plaintiff who fought a landlord's decision to withhold a security deposit had sustained an ascertainable loss because he had been forced to retain counsel.
"In what appears to be a classic case of 'tail wagging the dog,' the trial court granted Enterprise's motion for summary judgment on the pleadings on the basis Grimes had no ascertainable loss, where Enterprise had stipulated that it will not seek to collect any money from Grimes," Mundy said. "Grimes was not required under the UTPCPL to sit idly by and wait for Enterprise to collect $840 from her in order to assert her rights and attempt to stop Enterprise's alleged deceptive trade practices."
Defense counsel Theodore H. Jobes of Fox Rothschild did not return a call for comment.
Max Mitchell can be contacted at 215-557-2354 or firstname.lastname@example.org. Follow him on Twitter @MMitchellTLI. •