Kaplan v. Cablevision of Pa., Inc.

• Decision Date: 05 February 1996
• Citation: 448 Pa.Super. 306,671 A.2d 716
• Parties: , 29 UCC Rep.Serv.2d 425 Kenneth KAPLAN, on Behalf of Himself and all Others Similarly Situated, Appellant, v. CABLEVISION OF PA, INC. and its Successor in Interest, Suburban Cable TV Co., Inc., Appellees.
• Court: Pennsylvania Superior Court

Page 716

671 A.2d 716

448 Pa.Super. 306, 29 UCC Rep.Serv.2d 425

Kenneth KAPLAN, on Behalf of Himself and all Others Similarly Situated, Appellant, v. CABLEVISION OF PA, INC. and its Successor in Interest Suburban Cable TV Co., Inc., Appellees.

Superior Court of Pennsylvania.

Argued Nov. 2, 1995.

Filed Feb. 5, 1996.

Michael J. Boni, Philadelphia, and Michael D. Donovan, Haverford, for appellant.

Geoffrey L. Beauchamp, Norristown, for Cablevision of PA, appellee.

Alexander Kerr, Philadelphia, for Suburban Cable TV, appellee.

Before ROWLEY, President Judge, and TAMILIA, KELLY, POPOVICH, HUDOCK, FORD ELLIOTT, SAYLOR, HESTER and BROSKY, JJ.

HUDOCK Judge:

If a cable company fails to voluntarily rebate fees for periods of cable interruption, does this constitute an unfair or deceptive practice under the Pennsylvania Unfair Trade Practices and Consumer Protection Law (UTPCPL), 73 P.S. section 201-1 et seq., when the cable subscription agreement does not expressly obligate the cable company to provide continuous, uninterrupted service? We find that it does not and hence affirm the trial court's November 2, 1994 order which granted Cablevision of PA, Inc.'s and Suburban Cable TV Co., Inc.'s preliminary objections in the nature of a demurrer and dismissed Kenneth Kaplan's amended class action complaint with prejudice.

On September 8, 1993, Kenneth Kaplan filed a class action complaint against Cablevision of PA, Inc. and its successor in interest, Suburban Cable TV Co., Inc., on behalf of himself and all "current and former subscribers to Cablevision's cable television services." ¹ Kaplan alleged that Suburban and Cablevision (collectively referred to as the "Cable Companies") failed to provide continuous, uninterrupted cable service and failed to provide credit or notice of how to obtain credit for periods of service interruptions. Kaplan complained that the Cable Companies deliberately confused and misled their subscribers by not voluntarily providing rebates for periods of cable interruptions and by failing to inform them of their right to such rebates. Kaplan alleged that this conduct violated the UTPCPL, constituted a breach of the contractual duty of good faith and fair dealing and a breach of the implied warranty of merchantability allegedly contained in the subscription agreement. Kaplan sought money damages, a rebate for all periods when the cable services were interrupted, a declaratory judgment that the Cable Companies' practices were unlawful, and an injunction prohibiting the Cable Companies from continuing to engage in the alleged illegal practices.

The Cable Companies' filed preliminary objections to the class action complaint and Kaplan responded by filing an amended complaint on November 29, 1993 raising the same three claims. Once again Suburban and Cablevision filed preliminary objections on December 17, 1993 and January 7, 1994, respectively. Kaplan filed preliminary objections and an answer to the Cable Companies' preliminary objections on January 25, 1994. Oral argument was scheduled for August 17, 1994 but was rescheduled for November 1, 1994 when the trial judge recused himself. On November 2, 1994, the court entered an order granting the Cable Companies' preliminary objections, denying Kaplan's preliminary objections and dismissing Kaplan's amended complaint with prejudice. Kaplan then filed the instant appeal which was certified for en banc review.

Our scope of review from an order which sustains preliminary objections in the nature of a demurrer is plenary. Smith v. Exxon Corporation, 436 Pa.Super. 221, 223, 647 A.2d 577, 578 (1994). We must determine the legal sufficiency of the appellant's complaint and decide whether sufficient facts have been pled which would permit recovery by the plaintiff if ultimately proven. Id. We must accept as true all well-pleaded facts contained in the complaint together with all reasonable inferences which may be deduced therefrom. Al Hamilton Contracting Company v. Cowder, 434 Pa.Super. 491, 495, 644 A.2d 188, 190 (1994). We will sustain the trial court's demurrer if the facts pled in the plaintiff's complaint could not possibly state a cause of action permitting recovery. Id.

Section 201-3 of the UTPCPL makes it unlawful to engage in "unfair methods of competition and unfair or deceptive acts or practices." 73 P.S. § 201-3. Sections 201-2(4)(i) through (xvii) delineate examples of "unfair methods of competition" and "unfair or deceptive acts or practices." 73 P.S. § 201-2(4). Count one of Kaplan's amended complaint alleged that the Cable Companies violated sections 201-2(4)(v), (xiv) and (xvii) of the UTPCPL. ² Kaplan complained that the following conduct constituted an unfair and deceptive trade practice: (1) requiring customers to pay in advance for cable transmission then failing to provide continuous, uninterrupted cable programming; (2) failing to credit or refund money paid for such continuous and uninterrupted programming when outages occur; (3) misleading customers as to the availability of rebates by failing to specify how subscribers may be reimbursed for interruptions; and (4) actively deterring customers from requesting credit for the cable outages.

In Commonwealth ex rel. Creamer v. Monumental Properties, Inc., 459 Pa. 450, 329 A.2d 812 (1974), our Supreme Court explained the Legislature's purpose in enacting the UTPCPL. The Court explained:

The Legislature sought by the Consumer Protection Law [UTPCPL] to benefit the public at large by eradicating, among other things, "unfair or deceptive" business practices. Just as earlier legislation was designed to equalize the position of employer and employee and the position of insurer and insured, this Law attempts to place on more equal terms seller and consumer. These remedial statutes are all predicated on a legislative recognition of the unequal bargaining power of opposing forces in the marketplace. Instantly, the Legislature strove, by making certain modest adjustments, to ensure the fairness of market transactions. No sweeping changes in legal relationships were occasioned by the Consumer Protection Law, since prevention of deception and the exploitation of unfair advantage has always been an object of remedial legislation.

Although the Consumer Protection Law did articulate the evils desired to be remedied, the statute's underlying foundation is fraud prevention. This Court emphatically stated in Verona v. Schenley Farms Co., 312 Pa. 57, 64, 167 A. 317, 320 (1933), "[a]s a statute for the prevention of fraud, it must be liberally construed to effect the purpose...."

Since the Consumer Protection Law was in relevant part designed to thwart fraud in the statutory sense, it is to be construed liberally to effect its object of preventing unfair or deceptive practices.

Commonwealth ex rel. Creamer v. Monumental Properties, 329 A.2d at 815-17 (citations and footnotes omitted). See also Pirozzi v. Penske Olds-Cadillac-GMC, Inc., 413 Pa.Super. 308, 313, 605 A.2d 373, 375 (1992), alloc. den., 532 Pa. 665, 616 A.2d 985 ("The purpose of the UTPCPL is to protect the public from fraud and unfair or deceptive business practices[.]").

In his appeal Kaplan initially argues that the Cable Companies violated section 201-2(4)(v) of the UTPCPL which prohibits "[r]epresenting that goods or services have sponsorship, approval, characteristics, ingredients, uses, benefits or quantities that they do not have[.]" 73 P.S. § 201-2(4)(v). He claims that the Cable Companies misrepresented in the Subscription Agreement that they would provide continuous, uninterrupted cable programming.

Kaplan acknowledges in the amended complaint that the Cable Companies' contractual duties are defined by the terms of the Subscription Agreement which every cable subscriber executes prior to receiving cable services. Kaplan, however, does not specify which paragraph of the Subscription Agreement obligates the Cable Companies to provide continuous, uninterrupted cable service or unrequested credits for periods of interruption. He instead urges us to read into the Agreement by "necessary implication" this contractual obligation.

The doctrine of necessary implication is a principle of contract law which allows the court to imply a contract term "where it is clear that an obligation is within the contemplation of the parties at the time of the contracting or is necessary to carry out their intentions[.]" Slater v. Pearle Vision Center, Inc., 376 Pa.Super. 580, 586, 546 A.2d 676, 679 (1988). Our Supreme Court explained:

In the absence of an express provision, the law will imply an agreement by the parties to a contract to do and perform those things that according to reason and justice they should do in order to carry out the purpose for which the contract was made and to refrain from doing anything that would destroy or injure the other party's right to receive the fruits of the contract.

Id. (citing Frickert v. Deiter Brothers Fuel Company, Inc., 464 Pa. 596, 347 A.2d 701 (1975)). The court may apply the doctrine of necessary implication in only limited circumstances; it may imply a missing term in a parties' contract only when it is necessary to prevent injustice and it is abundantly clear that the parties intended to be bound by such term. Id.

We are unpersuaded by Kaplan's argument that the doctrine of necessary implication applies in the present case. We may not imply the contractual duty to provide continuous uninterrupted service or unrequested credits for outages when it is unclear whether the Cable Companies clearly intended to be bound by this obligation. The Cable Companies did not expressly state this obligation nor does the Subscription Agreement contain any provisions which suggest that the Cable Companies obligated themselves to provide continuous, uninterrupted service or to automatically provide rebates for interruptions in service. Compare Slater v. Pearle Vision Center, Inc., 546 A.2d at 679-80...