Jennifer Coatsworth was a panelist at the PA Bar Association Mid-Year Meeting in Bonita Springs, FL.  The panel discussed Attorney Wellness and Wellbeing During Covid-19: How Has the Legal Profession Been Impacted?  Members of the Quality of Life/Balance Committee and the Large Firm Committee discussed how the pandemic impacted the legal community, how to avoid stress in the practice of law, what we have learned going forward, including highlights from “PBA Continuity Task Force Report,” “Practice Forward Survey Report of the ABA,” 2017 ABA Wellness Pledge and other resources.

Congratulations to Philadelphia Partner Jennifer Segal Coatsworth on receiving the inaugural Reverend Dr. Martin Luther King, Jr. Diversity, Inclusion and Community Engagement Award from the Philadelphia Association of Defense Counsel.

We are proud of our partner, Jen Coatsworth, who was selected by the Philadelphia Bar Association Chancellor Lauren McKenna to moderate the latest Chancellor’s Forum “COVID-19’s Impact on the Legal Profession. The program featured a discussion of the report, Practicing Law in the Pandemic and Moving Forward: Results and Best Practices from a Nationwide Survey of the Legal Profession, which is the result of a survey of 4,200 American Bar Association members. It found that the need to work remotely during COVID-19 has caused high levels of stress and disengagement among lawyers, with these impacts disproportionately falling on women attorneys and attorneys of color. The panel discussion included potential solutions to the report’s findings.

In Gregg v. Ameriprise Financial, Inc., the Pennsylvania Supreme Court, upheld the ruling of the Superior Court and decided that the catchall provision of the Pennsylvania Unfair Trade Practices and Consumer Protection Law (UTPCPL) imposes strict liability on businesses, so the consumer need not establish that the business was negligent or acted intentionally.  The majority ruled that any deceptive conduct creating a likelihood of confusion or misunderstanding to the consumer gives rise to liability under this section. Plaintiff need not prove the elements of common law fraud or negligent misrepresentation.  The opinion was written by Justice Wecht, joined by Justices Donohue, Dougherty and Mundy.  Justice Todd penned a dissenting opinion, joined by Chief Justice Saylor and Justice Baer.

The decision will likely have a wide-ranging impact on the legal landscape in this area of the law and will affect businesses across every industry.  This could lead to a substantial increase in the number of consumer protection lawsuits filed against vendors across the Commonwealth.  Although a Plaintiff need not prove the elements of common law fraud or negligent misrepresentation, claimants must still show justifiable reliance and a causal relationship between the purported conduct and the alleged damages.

This Supreme Court opinion builds on the opinion from the Superior Court, which was based on its prior ruling in Bennett v. A.T. Masterpiece Homes, 40 A.3d 145 (Pa. Super. 2012).  In the Bennett  case, relying on the statutory language, the Superior Court interpreted the legislative intent of including the term “deceptive conduct” in the 1996 amendment to the provision and determined that a consumer is not required to prove the business acted with the intent to defraud in claims arising under the catchall provision. However, in the Bennett case, the Superior Court did not address the issue of the level of culpability that the consumer would have to prove in order to succeed under that provision.

In the Gregg case, the Superior Court expanded the Bennett ruling and established a strict liability standard and provided that the consumer need only prove that the business’ conduct “has the tendency or capacity to deceive.”  In reaching its conclusion, the Superior Court reasoned (similarly to its logic in Bennett) that if the legislature intended to limit the catch-all provision to negligent misrepresentation claims, it could have limited the language of the statute to “fraudulent or negligent conduct” rather than the more broadly defined “any…deceptive conduct.”

The Supreme Court expanded on the Superior Court’s reasoning and found that the addition of “deceptive” in the 1996 amendment to the type of conduct barred by the catchall provision indicated the legislative intent to expand the provision beyond the requirements for fraudulent conduct.  In making this determination, the Court relied not only on the reasoning established by the Superior Court, but also on the extensive case law interpreting the word “deceptive conduct” in other statutory provisions akin to the UTPCPL, such as the Federal Trade Commission Act and the Lanham Act.  Specifically, the Court looked at the long history of case law interpreting the definition of “deceptive conduct” in those statutes, as “having the capacity to deceive” rather than being premised on intent, and determined that the legislature must have been aware of that history when it decided to add the term “deceptive conduct” to the catchall provision in the 1996 amendment.  The Court found the absence of a state of mind requirement in the catchall provision as determinative of the legislative intent to exclude it, because other provisions of the UTPCPL explicitly contain such a requirement.

In its reasoning, the Court also looked at its own recent precedent in Commonwealth by Shapiro v. Golden Gate National Senior Care, LLC, 194 A.3d 1010, 1023 (Pa. 2018), where it held that the deceptive conduct includes an act or practice that has “the capacity or tendency to deceive” without regard to the actor’s intent to deceive or an actual deception.  The Court ruled that this is a lesser or more relaxed standard than that which is required for fraudulent or negligent misrepresentation; all that is required is for the acts or practices to be capable of being interpreted in a misleading way.  Thus, without a state of mind requirement, the Supreme Court finds that liability under the catchall provision may fairly be characterized as a strict liability offense.

 

Our partner, Jennifer Coatsworth was the “victim” of a surprise Zoom-based honor for her role as the outgoing Chair of the Pennsylvania Bar Association Civil Litigation Section. The partner with whom Jen has worked for many years, Bill Longo, just had to get in the picture … Congratulations, Jen for your great commitment to PBA!

Margolis Edelstein is honored to be recognized by the Pennsylvania Defense Institute Board of Directors, composed of insurance industry executives and members of the defense bar practicing in the Commonwealth, as the “Defense Firm of the Year.” Our Philadelphia based partner, Jennifer Coatsworth, Esq., will be accepting the award on behalf of the firm at the 2019 Annual PDI Conference on July 11 in Bedford Springs, PA, attended also by our Altoona area partner, Mary Lou Maierhofer, our Pittsburgh partner, Emily Mahler, and partner Mohammad Ghiasuddin, also from Philadelphia. On Friday, July 12, Jen will be co-presenting on “The Ethical Case for Diversity.”

Our Philadelphia colleague, Jennifer Coatsworth will be moderating a panel on Choosing Your Audience Wisely — Jury Selection in Federal and State Court on Friday, April 13, 2018, as part of the PBA Civil Litigation Section Retreat at Skytop Lodge in the Poconos. For more information http://www.pabar.org/public/sections/civ07/pdf/Civil-Lit-2018-retreat-registration.pdf

 

In Danganan v. Guardian Protections Services, a unanimous opinion authored by Chief Justice Saylor, the Pennsylvania Supreme Court has overturned the long-held understanding that the Commonwealth’s consumer protection statute, the Pennsylvania Unfair Trade Practices and Consumer Protection Law (UTPCPL) can only be employed by citizens of the Commonwealth.  Instead, the Court found that a citizen outside the Commonwealth may use the statute against Pennsylvania businesses for transactions that occurred outside of Pennsylvania.  The matter came to the Court by way of a question certified by the United States Court of Appeals for the Third Circuit, focused on the reach of the UTPCPL.  Jobe Danganan, a Washington, D.C. resident who moved to California, sued Guardian Protection Services, a Pennsylvania headquartered business, for continuing to bill him through the term of the Agreement for home protection services at his home in D.C., despite his attempts to cancel the contract when he moved to California.  The contract used by Guardian to continue to charge Danganan fees had a choice of law provision mandating that the Agreement be governed by the laws of Pennsylvania.

In reaching his conclusion, Chief Justice Saylor focused on the definitions of the terms “person” and “trade and commerce” found within the statute and determined that they did not denote a specific geographic requirement.  The UTPCPL generally provides, in pertinent part, that “[u]nfair methods of competition and unfair or deceptive acts or practices in the conduct of any trade or commerce…are…unlawful.”  §73 P.S. 201-3. The UTPCPL permits any “person” to bring a private cause of action against another “person” for violation of the statute.  73 P.S. §201-9.2(a).  Further, the statute defines “person” as “natural persons, corporations, trusts, partnerships, incorporated or unincorporated associations and any other legal entities.”  That term is employed to describe both the alleged victims and purported violators of the statute.  73 P.S. §201-2(2).  Further, the terms “trade” and “commerce” are defined within the statute as “the advertising, offering for sale, sale or distribution of any services and any property, tangible or intangible, real, personal or mixed, and any other article, commodity, or thing of value wherever situate, and includes any trade or commerce directly or indirectly affecting the people of this Commonwealth.”  73 P.S. §201-2(3).

Chief Justice Saylor specifically determined that the clause “directly or indirectly affecting the people of this Commonwealth” did not modify the preceding terms, but rather it was appended to the end of the definition and is preceded by the phrase, “and includes,” indicating an inclusive and broader view of trade and commerce than expressed by the preceding language.  In making this determination, Chief Justice Saylor rejected Guardian’s arguments related to the sufficient nexus theory, requiring that the UTPCPL would only apply to non-residents if there was a sufficient nexus between the transaction or injury and the forum state, such that the improper conduct substantially and primarily occurred within the Commonwealth.  Guardian argued that this would be consistent with the statute’s stated purpose of protecting Pennsylvanians.  However, the Court determined that the sufficient nexus test had no textual basis in the language of the UTPCPL, and thus, rejected its application.  Accordingly, a non-resident of the Commonwealth may now bring a cause of action under the UTPCPL against a Pennsylvania business based upon out-of-state transactions or conduct.

Donaldson v. Davidson Brothers, Inc., 2016 PA Super 150, involves a three-way fatal motor vehicle accident with a very complex procedural history. On June 16, 2008 on Route 322 in Potter Township, Centre County, a tractor trailer owned by Davidson Brothers and driven by George Donley was traveling westbound and rear-ended a vehicle operated by Sarah Donaldson, which thrust Donaldson’s auto into oncoming eastbound traffic where it collided with a vehicle owned by LJF, Appellant, and driven by Wilbert Quade, resulting in the death of Ms. Donadlson.  Ms. Donaldson’s brother brought the action as Administrator against the Davidson interests, who later joined LJF and Mr. Quade as additional defendants, alleging their negligence caused or contributed to Ms. Donaldson’s death. LJF settled property claims with the Davidson interests and the Release specifically carved out an exception of any claim for loss of contract, which was preserved.

In its Answer and Counterclaim to the Joinder Complaint, LJF asserted a claim for loss of contract against the Donaldson interests and Davidson interests.  The Davidson interests filed a Motion for Judgment on the pleadings, which lead to the appeal.  The central issue to all of the questions raised on appeal is whether an otherwise general release, which preserved a “loss of contract” claim, adequately preserved that issue, or whether the Economic Loss Doctrine applies to bar the claim.  LJF also argued that the Law of the Case Doctrine should not apply to enforce the Economic Loss Doctrine.

The Superior Court found that a cause of action for “loss of contract” was not barred by the Economic Loss Doctrine. The Court noted the Economic Loss Doctrine provides that no cause of action exists for negligence that results solely in economic damages unaccompanied in physical injury or property damage. The Superior Court disagreed with the trial court’s finding that claims for economic losses, such as “loss of contract” are not a foreseeable result of negligence, and thus allowing the contract claims to proceed would be counter to public policy.  Specifically, the Superior Court found the trial court misplaced its reliance on cases that did not address the issue of whether a claim was solely for economic losses. The Superior Court looked to the damages claimed here and found that there was some property damage claimed.

Philadelphia partner James Kahn and Jen Coatsworth received a defense verdict after a 12-day arbitration in a claim involving allegations of breach of contract and consumer deception in a residential mortgage program. They were successful in obtaining an order removing the case to arbitration over the plaintiff’s refusal, and then defeated multiple claims brought by the plaintiff in the arbitration which were supported by three experts called by plaintiff.

The defendant’s general counsel wrote to Mr. Kahn, stating: “Thank you very, very much for all of your work on this! You and Jen did an amazing job and we are incredibly grateful. It would be impossible to overstate how thrilled we are with these results. Congratulations to all on a job well done.”