DURKEY v. PACIFIC LIFE INSURANCE COMPANY et al

Filing 24

MEMORANDUM ORDER granting in part and denying in part 5 and 13 Motions to Dismiss. Motions to Dismiss denied as to Counts 1, III, IV, and V of plaintiff's complaint. Motions to Dismiss granted as to Count II of plaintiff's complaint, which is dismissed with prejudice. Further adopting 19 Report and Recommendation of Magistrate Judge Lenihan as the opinion of the Court. Signed by Judge David S. Cercone on 9/18/17. (njt)

IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF PENNSYLVANIA
FRANCIS JOHN DURKEY,

)
)

2:17cv317
Electronic Mail

)
)
)

District Judge David Stewart Cercone
Magistrate Judge Lisa Pupo Lenihan

)

Plaintiff,
v.

PACIFIC LIFE INSURANCE CO., et al.,

)
)

Defendants.

ECF Nos. 5 & 13

)
)
)

MEMORANDUM ORDER
The Complaint in the above captioned case was filed in the Court of Common Pleas of
Allegheny County, Pennsylvania on or about February 6, 2017. Subsequently, this action was
removed to this Court by Defendants on March 10, 2017, and was referred to United States
Magistrate Judge Lisa Pupo Lenihan for pretrial proceedings in accordance with the Magistrate
Judges Act, 28 U.S.C. §636(b)(l), and Local Rules of Court 72.C and 72.D.
The Magistrate Judge's Report and Recommendation (ECF No. 19), filed on August 4,
201 7, recommended that the Motions to Dismiss filed by Defendants Pacific Life Insurance
Company (ECF No. 5) and Irwin A. Klein (ECF No. 13) be granted in part and denied in part.
The Report and Recommendation recommended that Defendants' motions to dismiss be denied
as to Plaintiffs claims for negligent misrepresentation (Count I), breach of fiduciary duty (Count
IV), negligent supervision (Count V), and his claim pursuant to the UTPCPL (Count III). The
Report and Recommendation further recommended that Defendants' motions to dismiss be
granted with respect to Plaintiffs claim for fraudulent misrepresentation (Count II) and that

claim be dismissed with prejudice. Service was made on all counsel ofrecord via CM/ECF. The
parties were informed that in accordance with the Magistrate Judges Act, 28 U.S.C. §
636(b)(l)(B) and (C), and Rule 72.D.2 of the Local Rules of Court, that they had fourteen (14)
days to file any objections. Plaintiff and Pacific Life Insurance Company filed timely objections
to the Report and Recommendation (ECF Nos. 20 & 21). Pacific Life filed a Response in
Opposition to Plaintiffs Objections to the Report and Recommendation (ECF No 22) on
September 2, 2017. Plaintiff filed a Response in Opposition to Pacific Life's Objections to the
Report and Recommendation (ECF No. 23) on September 5, 2017.
While each of the Objections filed by the parties lacks merit, Plaintiffs Objection to the
Magistrate Judge's dismissal of his fraudulent misrepresentation claim warrants brief discussion.
In her Report, the Magistrate Judge correctly observed that claims for intentional
misrepresentation are generally preempted by the economic loss rule except where the defendant
fraudulently induces the plaintiff to enter into a contract. (ECF No. 19 at 9.) The Magistrate
Judge concluded that Plaintiffs claim did not fall within this exception because the allegedly
fraudulent statements by the Defendants were direetly related to "the terms and conditions of the
[insurance] policy and the parties' expected performance pursuant to that agreement." (Id. at
11 ). Plaintiff now contends that the Magistrate Judge should have analyzed his claim as one for
fraud in the execution, rather than fraud in the inducement. (ECF No. 20).
Plaintiffs Objection strikes the Court as a belated attempt to alter his strategy for the
express purpose of evading the Magistrate Judge's well-reasoned conclusion. As noted by
Defendants, Plaintiffs own Complaint clearly asserts that Defendants made representations
"with the intent to deceive and defraud the Plaintiff by inducing [him] to purchase life

2

insurance[.]" (ECF No. 1-2 ~ 156) (emphasis added). See also ECF No. 1-2 ~ 162 ("Defendants
intentionally made the false statements and representations ... for the purpose of deceiving the
Plaintiff and inducing Plaintiff to purchase an underfunded life insurance policy.") (emphasis
added). Neither the Complaint nor Plaintiffs Brief in Opposition to Defendants' Motion to
Dismiss (ECF No. 10) contain any indication that Plaintiff intended to assert a claim for fraud in
the execution. Moreover, while Plaintiff cites several cases discussing the difference between a
claim for fraudulent inducement and one for fraud in the execution in the context of the parole
evidence rule, he has not cited any case law drawing that same distinction for purposes of the
economic loss doctrine. (See ECF No. 20.) For each of these reasons, the Court concludes that
his Objection is meritless.
After de novo review of the pleadings and documents in the case, together with the
Report and Recommendation, the objections thereto and responses to the objections, the
following Order is entered:
AND NOW, this

fl

-'f.
.......
day of September, 2017,

IT IS HEREBY ORDERED that the Motions to Dismiss filed by Defendants Pacific

Life Insurance Company (ECF No. 5) and Irwin A. Klein (ECF No. 13) be GRANTED IN
PART AND DENIED IN PART. Defendants' motions to dismiss are DENIED as to Plaintiffs

claims for negligent misrepresentation (Count I), breach of fiduciary duty (Count IV), negligent
supervision (Count V), and his claim pursuant to the UTPCPL (Count III). Defendants' motions
to dismiss are GRANTED with respect to Plaintiffs claim for fraudulent misrepresentation
(Count II) and that claim is DISMISSED WITH PREJUDICE.

3

IT IS FURTHER ORDERED that the Report and Recommendation (ECF No. 19) of
Magistrate Judge Lenihan, dated August 4, 2017, is adopted as the opinion of the Court.

David Stewart Cercone
United States District Judge

cc:

Honorable Lisa Pupo Lenihan
United States Magistrate Judge
Kenneth R. Behrend, Esquire
Jason P. Gosselin, Esquire
Ronald J. Mancuso, Esquire
Stanley W. Greenfield, Esquire
(Via CMIECF Electronic Mail)

4