Misleading Conduct Violates Pennsylvania’s Consumer Protection Law

Source

Bennett v. A.T. Masterpiece Homes at Broadsprings, LLC, 2012 Pa. Super. 60, 40 A.3d 145 (2011)

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Analysis

In Bennett v. A.T. Masterpiece Homes at Broadsprings, LLC, the Pennsylvania Superior Court, in a published decision, held that “misleading conduct” was sufficient to impose liability under the Pennsylvania Unfair Trade Practices and Consumer Protection Law (UTPCPL). The UTPCPL is Pennsylvania’s consumer protection law and seeks to prevent “unfair methods of competition and unfair or deceptive acts or practices in the conduct of any trade or commerce….” 73 P.S.§201-3.

Before the 1996 amendments, the catchall provision addressed only “fraudulent conduct,” requiring a plaintiff to prove the elements of common law fraud. Pre-amendment decisions from the Pennsylvania Supreme Court had relied upon the plain language of the UTPCPL to hold that proof of common law fraud was necessary to state a claim under the catchall provision.

In 1996, the UTPCPL was amended to add “deceptive conduct” as a prohibited practice. The current catchall provision prescribes “fraudulent or deceptive conduct which creates a likelihood of confusion or misunderstanding.” 73 P.S.§201-2(4)(xxi). Despite the amendment of the UTPCPL, many courts continued to refer to cases citing the pre-amendment statute that required a plaintiff to prove common law fraud to recover under the UTPCPL catchall provision.

The Pennsylvania Superior Court has finally clarified the standard that a plaintiff needs to prove in order to recover under the UTPCPL. Specifically, the Pennsylvania Superior Court has held that a plaintiff does not have to prove fraud to recover under the catchall provision, but only has to establish that the defendant’s conduct was capable of being interpreted in a “misleading way.”
 

What It Means to You

By its terms, the UTPCPL only provides private remedies to consumers for “goods and services.” Now that the Pennsylvania Superior Court has lowered the bar for plaintiffs to recover under the UTPCPL, it is expected that more plaintiffs will assert UTPCPL claims. The most important area that will, most likely, be negatively impacted is the sale of residential real estate. Pennsylvania courts have held that the UTPCPL not only covers “goods and services,” but also covers residential real estate transactions between a buyer and seller. The lowering of the bar by the Superior Court will now make it easier for a buyer to seek recourse, including attorney’s fees, for misleading information provided by a seller during a real estate transaction. In addition to an award of attorney’s fees, a plaintiff may also seek treble damages, which will also significantly increase a defendant’s exposure.

Journal Edition

July 2012
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