BAR ESSAYS

Question 1

What is the purpose of the DTPA?

Answer 1

To provide for the protection of consumers against various false, misleading, and deceptive business practices.

Question 2

How to qualify for relief under the DTPA.

Answer 2

To qualify for relief under the DTPA, the plaintiff must meet the definition of consumer. A person who “seeks or acquires by purchase or lease, any goods or services,” is considered a consumer.

Question 3

Under the DTPA, a consumer may bring a cause of action alleging…

Answer 3

(i) a laundry-list violation, (ii) a breach of express or implied warranty, (iii) unconscionability, and (iv) violation of the insurance code, chapter 541.

Question 4

Express warranties are created by…

Answer 4

an affirmation of fact or promise, a description of the goods, or a model or sample.

Question 5

A claim for breach of express warranty, although brought under the DTPA, is evaluated pursuant to…

Answer 5

the Uniform Commercial Code and the common law.

Question 6

Under the UCC, a seller ____ disclaim an express warranty. However, ____________________.

Answer 6

can; disclaimer clauses that conflict with the express warranties, such as “all warranties, express or implied, are disclaimed,” are ignored.

Question 7

Implied warranty of merchantability that goods are fit for the ordinary purpose for which such goods are used.

Answer 7

The seller must be a merchant for this warranty to apply. In Texas, the implied warranty of merchantability generally does not apply to used goods if the purchaser knows that the goods are used.

Question 8

Implied warranty of fitness for a particular purpose arises when:

Answer 8

(i) the seller has reason to know the buyer’s particular purpose for the goods and that the buyer is relying on the seller’s judgment and (ii) the buyer in fact relies on the seller’s skill or judgment to select suitable goods.

Question 9

Unconscionable action or course of action is…

Answer 9

conduct that takes advantage of the consumer’s lack of knowledge, ability, experience, or capacity to a grossly unfair degree. Gross unfairness must be must be glaring, noticeable, flagrant, complete, and unmitigated. Knowledge and intent of the defendant are not required.

Question 10

Laundry-list violations:

Answer 10

(i) misrepresenting that the goods have characteristics, ingredients, uses, or benefits that they do not have; (ii) representing that an agreement confers or involves rights, remedies, or obligations that it does not have; (iii) failing to disclose material information concerning goods or services that was known at the time of the transaction if such failure to disclose was intended to induce the consumer into a transaction into which the consumer would not have entered had the information been disclosed; (iv) fraudulently misrepresenting that work or services have been performed on, or parts replaced in, goods; (v)representing that the goods or services are of a particular standard, quality, or grade when they are not.

Question 11

What must consumer show when claiming a violation of the DTPA?

Answer 11

The consumer must show that he relied on the defendant’s violative conduct to his detriment. A consumer must also show that the D’s actionable conduct was a “producing cause” of damages to the consumer. “Producing cause” is a cause that is a substantial factor in bringing about the damages and without which the damages would not have occurred. The D’s conduct does not need to be the sole producing cause of damages for the consumer to recover damages.

Question 12

Generally, the DTPA allows a private cause of action to recover…

Answer 12

“economic damages” for which conduct actionable under the DTPA was a producing cause. Economic damages refer to compensatory damages for pecuniary loss. Does not require that the actionable conduct be committed knowingly or intentionally. Lost income and medical expenses due to a personal injury are economic damages.

Question 13

If the actionable conduct was committed knowingly or intentionally…

Answer 13

the consumer may recover damages for mental anguish and potentially treble damages. Generally a plaintiff seeking damages for mental anguish must show that the mental anguish has been so severe as to cause a substantial disruption in his daily routine.

Question 14

Measurement of additional damages.

Answer 14

The limit on these additional damages is three times the economic damages if the conduct was committed knowingly, or three times the sum of economic damages and damages for mental anguish if the conduct was committed intentionally.

Question 15

Mandatory damages under the DTPA.

Answer 15

Each prevailing consumer must be awarded court costs and reasonable and necessary attorney’s fees. It is not necessary for the consumer to obtain a net recovery in order to prevail as long as the consumer is entitled to relief under a DTPA claim.

Question 16

Waivers of the DTPA, generally.

Answer 16

Generally, waivers of the Texas Deceptive Trade Practices Act (“DTPA”) are void and unenforceable, as they violate public policy.

Question 17

The DTPA allows for waivers when all of the following are present:

Answer 17

(i) the waiver is in writing and signed by the consumer, (ii) the consumer is not in a significantly unequal bargaining position, (iii) the consumer is represented by an attorney of his own choosing, and (iv) the waiver is conspicuous. The waiver must also contain specific language that the consumer consulted with an attorney and voluntarily consented to the waiver.

Question 18

An implied warranty of merchantability can be disclaimed by…

Answer 18

use of “as is,” “with all faults,” or similar language that makes plain that there is no implied warranty. The disclaimer may be oral, but it must use the term “merchantability” and must be conspicuous if in writing.

Question 19

An implied warranty of fitness for a particular purpose can be disclaimed by…

Answer 19

general language (including by the use of “as is”), but the disclaimer must be in writing and be conspicuous.

Question 20

The Federal Debt Protection Act provides…

Answer 20

redress to a person against any debt collector who violates the FDCPA’s standards of conduct for debt-collection activities related to a debt.

Question 21

A “debt collector” is…

under the Federal Act

Answer 21

any person who uses any instrument of interstate commerce or the mail in a business the principal purpose of which is the collection of any debts, or who is in the business of regularly collecting or attempting to collect either directly or indirectly debts owed to another. It generally does not apply to a person collecting his own debt.

Question 22

A debt collector is not allowed to:

Answer 22

contact a third-party for the purpose of collecting a debt without the consent of the consumer, state that the consumer owes any debts, to indicate that he is in the business of debt collection or imply or state that the consumer debtor has committed a crime that may result in arrest of the consumer debtor, contact the consumer at times that should be known to be inconvenient for the consumer, such as before 8 a.m. or after 9 p.m, or harass or threaten any person in connection with the collection of a debt.

Question 23

The Texas Debt Collection Act provides:

Answer 23

standards for the protection of consumers against debt collectors. Debt collectors include persons collecting their own debts. A violation of the TDCA may be brought under the DTPA as a “tie-in” statute.

Question 24

Under the TDCA a debt collector may not:

Answer 24

accuse a consumer of any crime or threaten criminal arrest or incarceration when the consumer has not committed a crime or repeatedly or continuously calling the consumer with the intent to harass the consumer. PLUS Fed. rules. In addition, collection of interest, a fee, or an incidental expense to an obligation by a debt collector is prohibited unless the charge, fee, or expense is expressly authorized by the agreement creating the obligation or otherwise legally chargeable to the consumer.

Question 25

Damages under the TDCA.

Answer 25

Under the TDCA, a person can recover actual damages, an injunction or restraining order, a civil penalty for certain offenses, and reasonable attorney’s fees. The plaintiff does not need to be a consumer to recover under the TDCA.

Question 26

Texas Insurance Code Chapter 541

Answer 26

Texas Insurance Code Chapter 541 is liberally construed for protection against unfair methods of competition and unfair or deceptive acts or practices within the insurance industry. A qualifying consumer may bring a claim for damages under both the DTPA and Chapter 541.

Question 27

The elements of a private cause of action under Chapter 541 are:

Answer 27

(i) the plaintiff is a person, (ii) the defendant is a person, (iii) the defendant violated either Chapter 541 or the DTPA laundry list on which the plaintiff relied to his detriment, and (iv) the defendant’s violation was a producing cause of actual damages to the plaintiff. In this context, “person” includes an individual and an insurance company.

Question 28

The Texas Insurance Code prohibits:

Answer 28

insurers from circulating misinformation regarding the terms of the policy, the benefits or advantages promised by the policy, or the dividends or share of surplus to be received by the policy. The Texas Insurance Code also prohibits unfair settlement practices in connection with first party insurance claims, including (i) misrepresenting coverage to a claimant, (ii) refusing to pay a claim without conducting a reasonable investigation, and (iii) failing to make a good faith attempt to a prompt and equitable settlement once liability has become reasonably clear. In addition, the Texas Insurance Code prohibits a defendant from failing, within a reasonable time, to affirm or deny coverage of a claim.

Question 29

If a violation of the Texas Insurance Code is proven…

Answer 29

a consumer can request and receive actual damages, plus court costs and attorney’s fees, treble damages if it is proven that a defendant knowingly committed a violation, and equitable relief, including an injunction or restraining order.

Question 30

Defenses to DTPA claim.

Answer 30

At least 60 days preceding a suit brought under the DTPA, a consumer must provide written notice to a defendant detailing the complaint, damages, and expenses, including attorney’s fees. If D offers to pay all of P’s claimed damages and attorney’s fees within 30 days of receiving notice of the P’s DTPA claim and the consumer rejects the offer, the D will have no liability under the DTPA. OR reliance on third-party information if the D gives notice to the consumer in writing at the time of the transaction that the D is relying on 3P information to make statements about the goods or services.

Question 31

Elements of a private cause of action under the DTPA.

Answer 31

(1) P is a consumer. (2) D is engaged in conduct that is connected with the consumer transaction. (3) D engaged in actionable conduct. (4) D’s violation was a producing cause. (5) P suffered damages as a result of the actionable conduct.

Question 32

DTPA statute of limitations.

Answer 32

2 years from when the DTPA violation occurred or from when the consumer discovered or reasonably should have discovered the wrongfully caused injury unless there is fraudulent concealment; then extended 180 days.

Question 33

Damages – both DTPA and Chapter 541

Answer 33

A qualifying consumer may bring a claim for damages under both the DTPA and the Texas Insurance Code. Damages awarded under the DTPA are in addition to any other remedies, but recovery cannot be doubled by recovery under both the DTPA and some other remedy.