Consumer Law

Question 1

Preamble

Answer 1

Deceptive Trade Practices Act protects the consumer’s rights in TX

Question 2

List Damages Under Tie-In

Answer 2

1) knowingly UP (3 x AD)
2) there are 3 separate clams
3) pure debt collection laim
4) DTPA tie-in claim

Question 3

Exceptions to DTPA Liability

Answer 3

1) Business consumers
2) large trans
3) newspaper advertisements pub w/out knowledge
4) professional services
5) PI

Question 4

Damages Available in DTPA Action

Answer 4

1) C prevails jury award economic damages
2) D acted knowingly 2 x economic damages
a) mental anguish ( 3 x econ) + MA
3) D acted intentionally
b) economic damages
c) MA damages
d) additional damages (3 x eco) + (3 x MA)
e) equitable relief and injunctive relief

Question 5

Test for Consumer Status of Person who Didn’t Purchase Good or Services

Answer 5

1) good faith

2) intent/ability to purchase

Question 6

Express Warrantees

Answer 6

1) representation of seller
2) affirmation of fact or promise
3) relating to goods
4) basis of bargain

Question 7

Penalties Under TX Debt Collection Act

Answer 7

1) $100 - $500 per violation (crim misd)
2) actual damages
3) injunctive relief
4) attys fees
5) $100 for each violation (limited)
6) consumer recover under DTPA tie-in

Question 8

List Tie-In Statutes & Relationship to DTPA

Answer 8

1) regulates
2) false
3) misleading acts
4) in connection with _____.
5) actual instead of economic

Question 9

DTPA Unconscionably Def

Answer 9

1) act or practice
2) consumers detriment
3) advantage of lack of knowledge/ability/capacity/experience
4) to a grossly unfair degree
5) at time of transaction

Question 10

Types of Acts on Laundry List

Answer 10

1) general misrepresentation
2) misrepresentation about legal rights
3) failure to disclose

Question 11

Duty of Good Faith Def

Answer 11

1) insurer has duty to exercise
2) good faith and fair dealing
3) w/ respect to insured

Question 12

Most Common Violations of Insurance Code Ch 541

Answer 12

1) misrepresentation and false advertising of policy Ks
2) defamation of competitor
3) unfair discrimination
4) unfair settlement practices

Question 13

Conduct that Violates Unfair Claim Settlement Practices Act

Answer 13

1) insurer respond w/in 15 days if primary
2) or 30 days if surplus
3) accept or reject claim 15 days
4) don’t reject, extend up to 45 days
5) payment prompt

Question 14

4 Claims Under DTPA

Answer 14

1) false, misleading or deceptive practice on LL + ruled on to consumers detriment
2) breach express/implied warranty
3) unconscionable action
4) violation of ch 541 insurance code + producing cause of mental anguish or economic damages

Question 15

“Consumer” Def

Answer 15

1) individual, partner, corp, this state
2) or subdivision or agency of this state
3) whoo seeks or acquired
4) by purchase or lease
5) any good or services
6) except business cons of $25 million +

Question 16

Conduct Violations of TDCA

Answer 16

1) threat
2) coercion
3) harassment/abuse
4) unfair/unconscionable conduct
5) fraudulent/deceptive/misleading representations

Question 17

Conduct Prohibited Under FDCA

Answer 17

1) harassment/abuse

2) false/misleading representations

Question 18

Communications Prohibited w/ Debtor Under FDCA

Answer 18

1) time and place restrictions (8-9)
2) can talk once has atty
3) can’t call at work once told

Question 19

Producing Cause Def

Answer 19

1) efficient/exciting/contribution
2) natural consequence
3) produced injuries/damages
4) substantial factor
5) would not have occurs but for

Question 20

Req Before Filing DTPA Suit

Answer 20

1) notice to D
2) 60 days before
3) complaint damages
4) attys fees

Question 21

DTPA Action Defenses

Answer 21

1) negation of producing cause
2) mediation/arbitration clause
3) statute of limitations (2)

Question 22

List Implied Warranties

Answer 22

1) UCC warranties
2) implied warranty of suitability in commercial leaseholds
3) implied warranty of good and workmanlike performance
4) implied warranty of habitability

Question 23

Consumer Standing

Answer 23

1) Under the DTPA, to satisfy standing as a “consumer” a person must:
a) seek or acquire goods or services by purchase or lease
b) goods or services acquired must form the basis of the complain
2) Issues
a) privity is not required
b) intended beneficiary: a 3P beneficiary may qualify as a consumer of goods or services as long as the transaction was specifically req by or intended to benefit the 3P and the good or service was rendered to benefit the 3P

Question 24

DTPA 4 x 4 Rights —- 1) LL Violations

Answer 24

LL violations: “LL misrepresentations are specifically enumerated in the DTPA; the consumer has to show reliance on the misrepresentation”

  a) misrepresenting that an agreement confers or involves rights, remedies, or obligations that it doesn't have
   b) failing to disclose information concerning goods or services that was known at the time of the transaction IF failure to disclose the information was intended to induce the consumer into a transaction into which the consumer otherwise would not have entered into

Question 25

DTPA 4 x 4 Rights — 2) Breach of Warranty

Answer 25

“Under DTPA, consumer has the ability to sue for breach of express or implied warranty. however, the DTPA does not define “warranty” and warranty must be established outside of the DTPA

Question 26

DTPA 4 x 4 Rights —- 2) Breach of Warranty - “Express Warranty”

Answer 26

1) affirmation of fact or promise that forms in part the basis of the bargain
a) ie descriptions, samples or models
b) also applies to services

Question 27

DTPA 4 x 4 Rights —- 2) Breach of Warranty - “Implied Warranty of Merchantability”

Answer 27

1) implied warranty of merchantability: requires a merchant (a person who deals in goods of the kind) and determinations if product is fir for its ordinary purpose;
2) case law in TX holds that IWM applies to used goods is the P proved the defect was present at the time the good was manufactured.

Question 28

DTPA 4 x 4 Rights —- 2) Breach of Warranty - “Implied Warranty of Fitness for a Particular Purpose”

Answer 28

1) seller knows buyers particular needs and seller knows buyer is relying upon sellers judgement

Question 29

DTPA 4 x 4 Rights —- 2) Breach of Warranty - “Implied Service Warranties”

Answer 29

1) implied warranty of good and workmanlike repair or modification of existing tangible goods

Question 30

DTPA 4 x 4 Rights —- 3) “Unconscionability”

Answer 30

1) an act that to consumers detriment takes advantage of lack of knowledge, ability, experience of consumer to a “grossly unfair degree”

Question 31

DTPA 4 x 4 Rights —- 4) Insurance Code

Answer 31

1) “here, the insurance code does not apply”

2) “an insurance code violation can be brought through the DTPA and those violations have been covered above”

Question 32

Causation: Producing Cause

Answer 32

1) DTPA requires that the deceptive act or practice must be a producing cause of economic or damages for mental anguish
2) producing cause is cause in fact: a DTPA P does not have to rove foreseeability

Question 33

Remedies —- 1) Economic Damages

Answer 33

1) compensatory damages for pecuniary loss.
2) specifically excluded are non-economic damages like pain and suffering, loss of consortium, disfigurement, physical impairments, etc
3) “consumer would have to bring another cause of action to recover for such things as pain and suffering”

Question 34

Remedies —- 2) Mental Anguish

Answer 34

1) requires a predicate finding of knowingly (D actual awareness of deceptive act or conduct)
2) P must show by direct evidence a “substantial disruptor of daily routine”

Question 35

Remedies —- 3) Additional Damages

Answer 35

1) discretionary damages determines by fact finder
2) “knowingly”: Ds actual awareness of deceptive act or conduct; cannot be higher than 3 times Ps economic damages
3) “intentionally”: Ds actual awareness couples w/ specific intent that the consumer act in detrimental reliance on the falsity or deception; cannot be more than 3 times Ps economic damages and mental anguish damages

Question 36

Remedies —- 4) Attys Fees

Answer 36

1) if a consumer prevails, then the consumer shall be awarded reasonable attys fees and costs

Question 37

DTPA Defenses —- 1) DTPA Waiver Req

Answer 37

1) generally unenforceable
2) requirements:
a) in writing and signed by the consumer
b) consumer cannot be in significantly disparate bargaining position; and
c) consumer is represented by legal counsel

Question 38

DTPA Defenses —- 1) DTPA Waiver Form

Answer 38

1) conspicuous and in bold-face type of at least 10 point font in size;
2) heading “Waiver of Consumer Rights, “ or words of similar meaning; and
3) in substantially the following form: “I waive my rights under the DTPA, Section 17.41, a law that gives consumers special rights and protections. after consultation with an atty of my own selection, I voluntarily consent to this waiver

Question 39

DTPA Defenses —- 2) DTPA Notice

Answer 39

1) pre-suit notice is req 60 days before filing suit under the DTPA; consumer must state “specific complain” and amount of economic damages, mental anguish, and attys fees
2) if notice isnt given, then D can file a motion for abatement w/in 30 days of filing its answer

Question 40

DTPA Defenses —- 3) Disclaimer of Warranties

Answer 40

1) “express warranties”: consider whether the EW and the words negating the EW can be reasonable construed together; if not the “negation” is “inoperative”
2) “implied warranties”: “as is” clause can disclaim IW as long as disclaimer is conspicuous and buyer was given opportunity to inspect and inspection would have revealed the defect
3) “consciousness” test: whether attention can be reasonable be expected to be called to the disclaimer, ie printed heading in all capitals
4) the rest of DTPA is affected by disclaimer of warranty

Question 41

DTPA Defenses —- 4) Professional Exemption

Answer 41

1) “DTPA does not apply to professional services
2) “professional services”: ‘the essence of which is the providing of advice, judgment, opinion, or similar professional skill’
3) exceptions to the exemption (which brings D back into DTPA)
a) express misrepresentation of a material fact
b) an unconscionable act
c) an express warranty, providing none of which can be characterized as advice, judgment, or opinion
d) LL failure to disclose info to induce agreement

Question 42

DTPA Non-Monetary Remedies

Answer 42

1) “Status Quo Ante”: an order to ‘restore’ available as long as mutual restoration; seller gets good back and buyer gets money back
2) “UCC Revocation”: buyer can revoke for non-conformity if w/in reasonable time of discovery and before any substantial change
3) “Injunctive Relief”: also available under DTPA

Question 43

Insurance Code —- Timetable

Answer 43

1) “insurer must follow a timetable when processing claims”
2) w/in 15 days of receipt of notice of claim, the insurer must acknowledge claim, begin its investigation, and request supporting documents from insured
3) w/in 15 days of receiving requested info, the insurer must notify claimant that it will accept or deny claim or that it needs additional time (which can extend deadline by another 45 days)
4) insurance company can get another 15 days if it has a “reasonable basis” to suspect arson

Question 44

Insurance Code —- Investigation

Answer 44

1) “insurer must conduct a reasonable investigation if it denies the claim”
2) unfair or deceptive act to refuse to pay a claim w/out conducting a reasonable investigation w/ respect to the claim

Question 45

Insurance Code —- Misrepresentation

Answer 45

1) “insurer cannot misrepresent the law or the terms of the policy”
2) misrepresenting a material fact or policy provision is an unfair or deceptive act/practice

Question 46

Insurance Code —- Explanation

Answer 46

1) “insurer must provide a reasonable explanation when denying a claim”
2) failing to properly provide to a policy holder a reasonable explanation of the basis of the denial of a claim or offer os a compromise

Question 47

Insurance Code —- Other Violations

Answer 47

1) refusing, failing, or unreasonable delaying a settlement offer under applicable first party coverage on the basis that other coverage may be available or that 3Ps are responsible for the damages suffered
2) failing to attempt in good faith to effectuate a prompt, fair, and equitable settlement of a claim w/ respect to which the insurer’s liability has become reasonably clear

Question 48

Agency Issues —- Insurance Agents

Answer 48

1) agent and insurer can be jointly and severally liable
2) insurance company liability for age follows basic agency law principles
a) agents can have actual or apparent authority; actual authority can either be express oe implied
b) insurers will be responsible for authorized acts under actual authority and for unauthorized acts if agent was acting w/in scope of “apparent authority”

Question 49

Remedies Types

Answer 49

1) actual damages
2) additional damages
3) attys fees
4) prompt payment statute

Question 50

Remedies —- Actual Damages

Answer 50

1) includes all damages recoverable at common law

2) includes mental anguish, but need to establish knowingly predicate and substantial disruption of daily routine

Question 51

Remedies —- Additional Damages

Answer 51

1) no more than 3 times actual damages w/ knowingly finding

Question 52

Remedies —- Prompt Payment Statute

Answer 52

1) for insurer violating timetable, insured can recover:
a) amount of claim
b) 18% on claim
c) reasonable attys fees
i) claim could include attys fees incurred when insurer refused to defend insured in lawsuit

Question 53

Debt Collection —- TDCA Tie-In

Answer 53

1) “TDCA is a tie-in statute, where a TDCA violation is also a DTPA violation.
2) If pled through the DTPA, the consumer would get actual damages, additional damages based upon a knowingly finding and attys fees.
3) however, case law requires consumer standing, which is unlikely in a debt collection case

Question 54

TDCA Definitions —- “Consumer”

Answer 54

1) an individual w/ consumer debt

Question 55

TDCA Definitions —- “Consumer Debt”

Answer 55

1) an obligation or an alleged obligation, primarily for personal, family, or household purposes and arising from a transaction or alleged transaction

Question 56

TDCA Definitions —- “Debt Collector”

Answer 56

1) a person who directly or indirectly engages in debt collection ie creditors

Question 57

TDCA Definitions —- “3P Debt Collectors”

Answer 57

1) follows FDCPA, does not include atty collecting a debt unless the atty has a non-atty employees who either are regularly engaged to solicit debts for collection or regularly make contact w/ debtors to collect debts

Question 58

TDCA Definitions —- 3P Debt Collectors Additional Responsibilities

Answer 58

1) $10K surety bond
2) if disputed debt, the 3PDC as a duty to investigate and to cease collection efforts until investigation determines accurate amount of debt
3) 3PDC has to warn in its initial oral or written communication that it is an attempt to collect a debt and that any information obtained will be used for that purpose and any subsequent communication must say its from a debt collector

Question 59

TDCA Violations

Answer 59

1) threatening to take action prohibited by law
2) using profane language or language intended to “abuse unreasonably”
3) causing a phone to ring repeatedly or continuously w/ intent to harass
4) using or threatening violence or other criminal means
5) accusing falsely or threatening to accuse falsely a person of fraud or any other crime

Question 60

TDCA Non-Violations

Answer 60

1) informing debtor that the debtor may be arrested after proper ct proceedings if the debtor has violated a criminal law of the state
2) threatening to file civil lawsuits to collect the debt
3) exercising or threatening to exercise a statutory or contractual right of seizure, repossession, or sale that does not require ct proceedings

Question 61

TDCA Remedies —- Types

Answer 61

1) injunctive relief
2) actual damages
3) $100 minimum damages
4) attys fees

Question 62

TDCA Remedies —- Injunctive Relief

Answer 62

1) under TDCA a consumer doesn’t have to prove CL req for injunction

Question 63

TDCA Remedies —- Actual Damages

Answer 63

1) all damages recoverable under CL, including mental anguish

Question 64

TDCA Remedies —- $100 Minumum Damages

Answer 64

1) for specific violations if consumer proves actual damages or gets injunctive relief

Question 65

FDCPA - “Consumer” Def

Answer 65

1) a person obligated or allegedly obligated to pay a debt

Question 66

FDCPA - “Debt” Def

Answer 66

1) any obligation or alleged obligation of a consumer
2) to pay money from a transaction in which the money, property, insurance, or services are primarily for personal, family, or household purposes

Question 67

FDCPA - “Debt Collector” Def

Answer 67

1) any person who uses any instrumentality of interstate commerce or the mails in any business
2) the principal purpose of which is the collection of any debts, or
3) who regularly collects or attempt to collect, direct or indirectly, debts owed or due or asserted to be owed or due to another

Question 68

FDCPA Violations —- Types

Answer 68

1) validation notice
2) mini-miranda
3) communication restrictions
4) violations

Question 69

FDCPA Violations —- Violation Notice

Answer 69

1) timing: w/in 5 days after initial communications the DC must send a validation notice to the debtor
2) notice has to include the amount of debt and name of the creditor

Question 70

FDCPA Violations —- Mini Miranda

Answer 70

1) initial written or oral communication must disclose that DC is attempting to collect a debt and that any information obtained will be used for that purpose; all subsequent communications must disclose that it is from a DC

Question 71

FDCPA Violations —- Communication Restrictions

Answer 71

1) limited contact w/ persons other than the consumer - location information only
2) place restrictions: no calls to workplace if DC knows or has reason to know employer prohibits such communications
3) time restrictions: DCs have to assume that a convenient time for contact is after 8 am and before 9 pm

Question 72

FDCPA Violations —- Violations

Answer 72

1) using or threatening use of violence or other criminal means to harm the physical person, reputation or property of any person
2) using obscene or profane language
3) causing a phone to ring continuously w/ intent to annoy, abuse, or harass
4) representing that nonpayment of any debt will result in the arrest or imprisonment of any person or the seizure, garnishment, attachment, or sale of any property unless such action is lawful and DB or creditor intends to take action
5) threatening to take action that cannot legally be taken or that is not intended to be taken

Question 73

FDCPA Remedies

Answer 73

1) actual damages
2) additional damages
3) attys fees