TEXAS DECEPTIVE TRADE PRACTICES ACT Flashcards
DTPA
Construction, Application and Waiver
The DTPA shall be liberally construed to protect consumers, it generally may not be waived
generally waiver is void unless:
- Waiver is in writing and signed by consumer;
- Consumer is not in a significantly disparate bargaining position; and
- Consumer is represented by legal counsel in seeking or acquiring the goods or services.
applicability: an entity who seeks or acquires by purchase or lease, any goods or services,
DTPA
APPLICABILITY: PROPER PARTY PLAINTIFF–CONSUMER
who?
1, entity (An individual, partnership, corporation, this state, or a subdivision or agency of this state )
2, seek or acquire:
any purchaser or anyone with a good faith intent to purchase is a consumer, no requirement of pay for the transaction
TEST: any purchaser acquires the goods or services, as does any intented beneficiary (ppl who didn’t buy garage door but killed by it) but incidental beneficiary does not acquire (fiance of consumer, borrower)
3, by Purchase or Lease:
truly free services are not subject to the DTPA, but purchase is broadly defined and the consumer doesnot have to be the one who pays (family members)
test for purchase: did the person claim to be a consumer aquire the good or services by a purchase?
4, Goods or Services: ***goods include real estate; but excludes money and intangibles; ***services include insurance; exclude merely lending money , but if from the consumer's perspective, the loan is an essential part of the transaction (purchase of a house), it is subject to the DTPA
***Inventory purchased for resale are goods
DTPA
***Exemptions
a. Business Consumer
burden to prove?
1, normal business consumers are included within the definition of consumer
2, but A “business consumer” with assets of $25 million or more or
one that is owned or controlled by a corporation or entity with assets of $25 million or more are excluded
3, non business consumer (Bill Gates) are included regardless of assets
A DEFENDANT HAS THE BURDEN TO PROVE THE BUSINESS CONSUMER EXCEPTION AS AN AFFIRMATIVE DEFENSE.
DTPA
- **Exemptions
b. Statutory Exemptions - **exception
1995 Exemptions
1. Professional Services
Section 17.49(c) provides that nothing in the DTPA shall apply to “a claim for damages based on the rendering of a professional service, the essence of which is the providing of advice, judgment, opinion, or similar professional skill.”
***test: what is the essence of the service provided? exemption is service specific not profession specific
example: real estate broker who doing evaluation is; but list the property on ad is not
and generally lawyers, doctors, accountants, architects and engineers are exempted
***exception to the Professional Services exemption:
1, even an otherwise exempt professional is subject to the act, for a material misrepresentation of a material fact, unconscionability (Attorney takes unfair advantage of a client’s ignorance to a grossly unfair degree), a failure to disclose, or breach of warranty that can’t be characterized as AJO…
2, personal injury claims
nothing in this subchapter shall apply to a cause of action for bodily injury or death or the infliction of mental anguish, except: (b) (h)
under (b): economic damages and damage for mental anguish may be recovered, even if these damages arise out of a personal injury, but not torts soft damages
(h) tie-in (all damages arising out of the injury can be recovered under tie-in)
3, large transactions
(1) written contract 100k: claims relating to a contract over 100k dollers are exempt if its in writing, signed by the consumer and the consumer is represented by an attorney; ***but does not apply to a consumer’s residence
(2) Transactions Over $500,000: claims relating to a transaction over 500k dollers, no need for other stuff in 100k,
* **but does not apply to a residence
DTPA
who may be sued
anyone that has anything to do with a consumer
1, no privity: a mediate parties may be sued without privity, but the transaction must form the basis for the complaint
(misrepresentation of the real property agent, agent and her store can be sued by buyer)
2, “In Connection With” Requirement—Remote Parties:
this requirement is a judicial rule that applies to remote parties that are not part of the transaction
one test to ask: did the misrepresentation of the remote party directly reach the consumer, if yes its in connection with (suppliers’ ad is given to the consumer when the deal of the house was made)
DTPA
CLAIMS UNDER THE ACT
general:
1, laundry list
2, Unconscionability
3. Breach of Warranty
4, Chapter 541 insurance code
separate but cumulative: conduct may be actionable under mutiple claims; but only a single recovery
DTPA
CLAIMS UNDER THE ACT
1, the laundry list
most common DTPA claim, and a single act may violate sevaral provisions
***(1) The use or employment by any person of a false, misleading, or deceptive act or practice that is:
(A) specifically enumerated in a subdivision of Subsection (b) of Section 17.46 of this subchapter; and
(B) relied on by a consumer to the consumer’s detriment;
1, Reliance Required: must be relied on by A consumer to THE consumer’s detriment (Hus bought stuff for wife rely on advice, Wife may recover as a consumer because Husband relied on the misrepresentation to Wife’s detriment.)
2, Prohibited Practices
most common is general misrepresentations, M about legal rights, and failure to disclose
3, No Privity/Knowledge/Intent
Violations of the laundry list are actionable without regard to privity and may occur prior to, simultaneously with, or after a contract has been formed. It is also significant to note that knowledge or intent is NOT an element of a laundry list violation, unless required by the particular subdivision.
4, General Misrepresentations
any misrepresentation is actionable, unless it is mere puffing or opinion or a vague generalization
5, Parol Evidence Rule, statute of fraud inapplicable
6, Misrepresentations Regarding Legal Rights
any misrepresentation regarding legal right is actionable, but a valid contract interpretation is not even if it proves to be incorrect
*7, Failure to Disclose
The consumer must establish 4 elements: (INCLUDING INTENT, no need for special relationship)
1. the defendant knew information regarding the goods or services;
2. the information was not disclosed;
3. there was an INTENT to induce the consumer to enter into the transaction; and
4. the consumer would not have entered into the transaction on the same terms had the information been disclosed.
DTPA
CLAIMS UNDER THE ACT
2, Unconscionability
1, an act or practice, which to a consumer’s detriment, takes advantage of the lack of knowledge, ability, experience, or capacity of the consumer to a grossly unfair degree.
this is a separate and cumulative claim
determined at the time of the transaction; dont confuse it with common law and UCC
2, Objective Standard
no need to show a calpable mental state (didn’t know…)
3, Grossly Unfair
glaringly noticable, complete flagrant and unmitigated
DTPA
CLAIMS UNDER THE ACT
3. Breach of Warranty
The DTPA is both an independent basis for a cause of action and a vehicle through which to bring an otherwise existing claim. Any breach of warranty is actionable by a consumer under the DTPA.
1, DTPA Does Not Create Any Warranties
*** a warranty must be exsit and be established outside of the DTPA, a breach of warranty is actionable by the consumer through the DTPA
2, May be Created by Statute or Common Law
look to all other state law to see if there is a warranty and whether there has been a breach
3, Warranties May be Disclaimed
valid disclaimers and limitations are still valid even if the claim is brought through the DTPA
***completely analize the warranty claim as if there is no DTPA; if u find warranty and u find a breach go to the DTPA for damages
a, Express and Implied Warranties Under Chapter 2 of the Business and Commerce Code (equal to UCC) (all UCC warranties might be brought by a consumer through the DTPA)
exception: Consumer may not assert implied warranty under the DTPA against remote manufacturer. (as a matter of law, an implied warraty by a remote manufacturer is not made in connection with the consumer’s transaction)
b. Implied Warranty of Suitability in Commercial Leaseholds
in any commercial lease, there is an implied warranty that the property is suitable, fit for its ordinary purpose, (roof leak) the warranty may be waived etc. by an “as is” clause
c. Implied Warranty of Good and Workmanlike Performance in Service Contracts
in any contract for repair or modification of tangible chattles or real estate, there is an implied warranty of …
*** the warranty may not be waived
No Implied Warranty for Professional Service.
d. Implied Warranty of Good and Workmanlike Performance (may be waived) and Habitability (generally may not) in Sale of a new Home
DTPA
CLAIMS UNDER THE ACT
4. Chapter 541 insurance code
1, the use or employment of an act or practice in violation of Chapter 541 of the Texas Insurance Code. Note that this claim is similar to a claim for breach of warranty in that it must be established outside of the DTPA.
any violation of the 541 is actionable as a violation of the DTPA
*** this is not a tie in statute
DTPA
DEFENSES
notice
settlement
there is very few statutory defenses, and common law defenses do not apply
Negation of Producing Cause: a party may negate causation and preclude damages under the DTPA
Mediation/Arbitration: either party may compel mediation, and DTPA claims are subject to arbitration
Pre-Suit Notice
When Required: unless a DTPA claim is filed as a counterclaim, the consumer must give written notice at least 60 days before filing suit; notice must contain the nature of the claim, and a dollar amount for damages
Remedy for Failure to Give Notice: abatement to allow notice
Contents of Settlement
1, D. may offer to settle in response to the P.’s notice; 2, may offer to settle in kind but must reduce that to a dollar amount (a promise to restore the car to its original condition, valued at $1,000)
Effect of Settlement
If the consumer rejects the defendant’s tender of settlement, it may be filed with the court together with an affidavit certifying its rejection.
DTPA DEFENSES damages rejection of a reasonable settlement offer attorney fees
date of commencement for an action
rejection of a reasonable settlement offer limits damages and preclude punitive damages.
If the court finds that the Defendant’s settlement offer is the same, substantially the same as, or more than, the damages found by the trier of fact, the consumer may not recover as damage an amount in excess of the lesser of:
(i) the amount of damages tendered in the settlement offer; or (ii) the amount of damages found by the trier of fact.
attorney fees
attorney’s fees are also limited if the offer of attorney’s fee was reasonable when made
Limitations
Discovery Rule
An action under the DTPA must be commenced within two years after the date on which the cosumer knew or should have known of the act or practice complaint of, most courts use the date of injury as the date the consumer should have known
DTPA
REMEDIES
1, Producing Cause
“A producing cause is a substantial factor which brings about the injury and without which the injury would not have occurred.” (the lowest causation standard in TX; do not confuse with proximate cause)
a. “As Is” in contract
u may negate producing cause if a contract says as is; the consumer is not relying on anything the D. is represented; this is not a wavier
2, Damages in General
DTPA general damage standard is economic damages, if the D. acted knowingly, the consumer may recover damages for mental anguish and **UP TO 3 TIMES* ecnomic damages; if the D. acted intentionally, P. may also recover UP TO 3 TIMES damages for mental anguish
3, Economic Damages
includes medical expenses, property damages, lost income are all economic damages
excludes pain and suffering, loss of consortium, disfigurement
4, ***Mental Anguish Damages (not automatically, knowingly + high standard)
u must show that the D. acted knowingly as a legal prerequisite to recover mental anguish damages
a. Knowingly
actual awareness, knew or should have known at the time of the act; subjective or objective
b. Mental Anguish-Standard of Proof
there is a high burden of proof (high degree of mental pain) even if the legal standard (intentionally) is met
“substantial disruption in… daily routine” or “a high degree of mental pain and distress” that is “more than mere worry, anxiety, vexation, embarrassment or anger.”
5, additional damages (punitive = upto twice the original)
When recoverable
if the jury find D. acted knowingly, jury may reward the consumer UP TO 3 TIMES economic damages
if the D. acted intentionally, the consumer may recover UP TO 3 TIMES economic and damages for mental anguish
***Intentionally is knowingly plus intent.
DTPA
REMEDIES
Computing Additional Damages
**answer template**
If consumer prevails, jury may award “economic damages.”
If jury finds defendant acted “knowingly,” jury may also award additional damages, up to twice the economic damages [up to a total of three times economic damages], and may also award damages for “mental anguish.”
If jury finds defendant acted “intentionally,” jury may also award economic damages, damages for mental anguish and additional damages up to twice the amount of economic damages and damages for mental anguish [up to a total of three times economic and mental anguish damages].
***IF ASKED WHAT CIVIL REMEDIES, ADD: “IN AN APPROPRIATE CASE THE CONSUMER MAY ALSO RECOVER EQUITABLE AND INJUNCTIVE relief
Example:
Consumer prevails. Jury awards $10,000 for economic damages.
Jury finds “knowingly”
(Economic damages in the amount of $10,000 have already been awarded) Jury awards damages for mental anguish in the amount of $10,000.
Jury may award additional damages in an amount between $0 and $20,000.
(Up to twice economic damages)
Total recovery after a finding of knowingly is between $20,000 and $40,000.
Jury finds “intentionally”
(Economic damages in the amount of $10,000 and mental anguish damages in the amount of $10,000 have already been awarded)
Jury may award additional damages in an amount between $0 and $40,000.
(Up to twice economic damages and damages for mental anguish)
Total recovery after finding of intentionally is between $20,000 and $60,000.
DTPA
REMEDIES
attorney’s fees
a. Consumers’ Attorneys’ Fees (for all statutes)
When Awarded
“Each consumer who prevails shall be awarded court costs and reasonable and necessary attorneys’ fees.”
the award of AF is mandatory, but the amount is discretionary standard: reasonable and necessary
amount: AF must be awarded on an hourly basis in a dollar amount
b. Defendants’ Attorneys’ Fees In General. (unusual and only DTPA)
“on a finding by the court that an action under this section was groundless or brought in bad faith, or brought for purposes of harassment, the court shall award to the defendant reasonable and necessary attorneys’ fees and court costs.
groundless: no basis in law or fact
bad faith: malice, ill will or spite
harassment: for the sole purpose of harassment
amount: hourly and in a dollar amount
