PHILADELPHIA, March 30 – The Pennsylvania Supreme Court will review a Superior Court decision holding that Ameriprise Financial, Inc. may owe a fiduciary duty to a couple who were allegedly misled into buying an insurance policy and annuity.
In September, the Pa. Superior Court reversed in part a summary judgment ruling in favor of Ameriprise in which the trial court struck claims of breach of fiduciary duty against an Ameriprise agent made by Plaintiffs Eugene and Ruth Yenchi. The Yenchis alleged that the Ameriprise agent used a financial planning review the Yenchi’s purchased as an opportunity to sell life insurance and annuities, and that in the process, Ameriprise’s agent made material misrepresentations.
In what it called a matter of first impression, the Superior Court ruled that the sale of insurance was “typically considered an arm’s-length transaction, in which the insurer incurs no fiduciary duty apart from those that may be defined in the insurance contract.” It also ruled, however, that under the facts alleged by the Yenchis, they paid an Ameriprise agent a fee for a financial planning review, which led to recommendations to buy life insurance through the agent, under what the Yenchis alleged were fraudulent circumstances.
The Superior Court held that there were sufficient facts present which might prove a confidential relationship existed between the Yenchis and their agent which, under Pennsylvania law, could create a fiduciary duty:
“the Yenchis claim a confidential relationship arose with Mr. Holland [the agent], prior to their purchase of life insurance, when they agreed to purchase what they believed was independent, financial planning advice. It is significant that Mr. Holland cultivated a relationship with the Yenchis first as a financial advisor, not an insurance salesperson. That this advise resulted in their purchase of life insurance products from [Ameriprise] is not determinative of the nature of the relationship.”
The Superior Court opinion can be found here: Yenchi v. Ameriprise Financial (Pa. Super. 2015) .
In granting Ameriprise’s petition for allowance of appeal, the Supreme Court indicated it will review whether the Superior Court erred in reversing the summary judgment decision striking the Yenchi’s fiduciary duty claims, as well as Superior court rulings vacating decisions to exclude certain evidence at trial.