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Consumer Law Lecture

Q: DTPA Exemption (3) Professional Services

DTPA does not 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 service.' TEST: What is the essence of the service provided? Exemption is service specific, not profession specific. Generally, lawyers, accountants, architects, and engineers perform a professional service.

Q: DTPA Exemption for (3) Professional Services does not apply to... (exceptions to the exemption).

Material Misrepresentations: 'An express misrepresentation of material fact that cannot be characterized as advice, judgment, or opinion.' Failure to Disclose: 'a failure to disclose information in violation of 17.46' Unconscionability: 'An unconscionable action or course of action that cannot be characterized as advice, judgment, or opinion.' Breach of EW: 'breach of an express warranty that cannot be characterized as advice, judgment, or opinion.'

Q: DTA Exemption (4) Personal Injury Claims

DTPA 17.49(e): 'Except as specifically provided in 17.50(b) or (h), nothing in this subchapter shall apply to a cause of action for bodily injury, death, or infliction of mental anguish' If 17.50(b) or (h) apply, this exemption does not apply.

Q: Who may be sued under DTPA: General Rule: Basis of the Complaint/No Privity

All 'immediate parties' may be used: Anybody that is dealing with the consumer. No privity is required, but the transaction (in which the immediate party was involved) must form the basis of the complaint.

Q: Who may be sued under DTPA: 'in connection with' requirement for remote parties.

Remote Party: Someone who is not an 'immediate party.' Not dealing with the consumer or having anything to do with the consumer (upstream manufacturers or suppliers) To be actionable, DTPA violations by remote parties must be committed 'in connection with' the consumer's transaction. Key Q: Did the misrepresentation committed by the remote party reach the consumer? If yes, then it is 'in connection with'

36 important questions on Consumer Law Lecture

DTPA Exemption (2) Newspapers

DTPA does not apply to newspapers that published advertisements without knowledge of the false, misleading, or deceptive nature of the publication.

DTPA Exemption (3) Professional Services

DTPA does not 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 service."

TEST: What is the essence of the service provided? Exemption is service specific, not profession specific.
Generally, lawyers, accountants, architects, and engineers perform a professional service.

DTPA Exemption for (3) Professional Services does not apply to... (exceptions to the exemption).

Material Misrepresentations: "An express misrepresentation of material fact that cannot be characterized as advice, judgment, or opinion."
Failure to Disclose: "a failure to disclose information in violation of 17.46"
Unconscionability: "An unconscionable action or course of action that cannot be characterized as advice, judgment, or opinion."
Breach of EW: "breach of an express warranty that cannot be characterized as advice, judgment, or opinion."

DTA Exemption (4) Personal Injury Claims

DTPA 17.49(e): "Except as specifically provided in 17.50(b) or (h), nothing in this subchapter shall apply to a cause of action for bodily injury, death, or infliction of mental anguish"

If 17.50(b) or (h) apply, this exemption does not apply.

DTA Exemption (4) Personal Injury Claims - 17.50(h)

All damages arising out of a personal injury are recoverable under 17.50(h) as actual damages for a violation of a tie-in STT.

DTA Exemption (5) Large Contracts - 2 different exemptions here

(a) Written Contracts for $100K
(b) Transactions Over $500K

DTA Exemption (5) Large Contracts - (b) Transactions over $500,000 (the over $500K exemption)

The DTPA does not apply to a cause of action arising out of a transaction, pa project, or set of transactions relating to the same project, involving a total consideration by the consumer of more than $500K."

For this exemption to apply, no need for a written K or an attorney. Just a transaction, etc over $500K.
BUT: This exemption does not apply to a residence.

Who may be sued under DTPA: General Rule: Basis of the Complaint/No Privity

All "immediate parties" may be used: Anybody that is dealing with the consumer.
No privity is required, but the transaction (in which the immediate party was involved) must form the basis of the complaint.

Who may be sued under DTPA: "in connection with" requirement for remote parties.

Remote Party: Someone who is not an "immediate party." Not dealing with the consumer or having anything to do with the consumer (upstream manufacturers or suppliers)
To be actionable, DTPA violations by remote parties must be committed "in connection with" the consumer's transaction.
Key Q: Did the misrepresentation committed by the remote party reach the consumer? If yes, then it is "in connection with"

Claims under the DTPA are "cumulative"

Rule: There may be multiple claims available under the various sections of 17.50(a), but only a single recovery of damages is allowed.

"If there are different acts or practices resulting in different damages, cumulative recovery is permissible. The provisions of the DTPA are not exclusive. The remedies provided by the DTPA are in addition to any other procedures or remedies provided for in any other law."

Claims under the DTPA: 17.50(a)

A consumer may maintain an action where any of the following constitute a producing cause of economic damages or damages for mental anguish:

(1) The use or employment by a person of a false, misleading, or deceptive act/practice that is: (A) Specifically enumerated in 17.46(b) [the laundry list]; and (B) Relied on by the consumer to the consumer's detriment.
(2) Breach of an express or implied warranty.
(3) Any unconscionable action or course of action by any person; or
(4) the use or employment of any person of an act in violation of Insurance Code Ch 541.

Claims under DTPA: 17.50(a)(1) the Laundry List

DTPA includes a list of more than 30 acts/practices that are deemed to be false, misleading, or deceptive. This is generally referred to as the "laundry list." It is the most common DTPA claim. A single act may violate several provisions of the laundry list.

Claims under DTPA: 17.50(a)(1) the Laundry List - Prohibited Practices

The laundry list makes more than 30 different acts/practices prima facie false, deceptive, or misleading. 3 most common: (1) General misrepresentations; (2) misrepresentations about the law; (3) a failure to disclose.

Claims under DTPA: 17.50(a)(1) the Laundry List - 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. Also, knowledge/intent is not an element of a laundry list violation, unless required by the particular subdivision (most do not).

Actual laundry list is set forth in...

17.46(b)

Claims under DTPA: 17.50(a)(1) the Laundry List - (1) General Misrepresentations

To constitute a violation of 17.46(5) or (7), it is only necessary that the actor makes a representation of fact regarding goods or services that is inaccurate or false. Statements may be oral or written. Statements that constitute mere opinion or puffing are not actionable under DTPA.

BL: Any misrepresentation is actionable, unless it is mere puffery/opinion or a vague generalization.

Claims under DTPA: Parole Evidence Rule + SoF Inapplicable

PER and SoF have nothing to do w/ a DTPA claim (statutory claim) and are inapplicable.

Claims under DTPA: 17.50(a)(1) the Laundry List - (2) Misrepresentations Regarding Legal Rights

Any misrepresentation of a legal right is actionable--i.e., a LL's misrepresentation of a right to enter and take equipment. A valid contract interpretation is NOT--even if it turns out to be false, it is not a misrepresentation.

Claims under DTPA: 17.50(a)(1) the Laundry List - Failure to Disclose [17.46(b)(24)]

Consumer must establish 4 elements:

D knew information regarding goods/services;
the info was not disclosed;
there was an intent to induce the consumer to enter into the transaction;
consumer would not have entered into the transaction on the same terms had the info been disclosed.

Note: No need for a special relationship. The obligation to disclose always exists under DTPA.

Claims under DTPA: 17.50(a)(2) Unconscionability: Rule

Unconscionability = "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."

Unconscionability is determined at the time of the transaction (CF, UCC + common law)
Objective Standard: D need not have had a culpable mental state.
"Grossly unfair": Glaringly noticeable, flagrant, complete, unmitigated.

Claims under DTPA: 17.50(a)(3): Breach of Warranty - DTPA does not create any warranties

A warranty must exist + be established outside of the DTPA. A breach (of the W) is actionably by a consumer through the DTPA.

Claims under DTPA: 17.50(a)(3): Breach of Warranty - Warranties may be created by statute or common law

Look to all other state law to see if there is a W and whether there has been a breach.

Claims under DTPA: 17.50(a)(3): Breach of Warranty - Warranties may be disclaimed.

Valid disclaimers and limitations are still valid even if the claim is brought under DTPA.

Claims under DTPA: 17.50(a)(3): Breach of Warranty: 4 main types

Express + Implied Warranties under TBCC Chapter 2
Implied Warranty of Suitability in Commercial Leaseholds
Implied Warranty of Good + Workmanlike Performance in Service Contracts
Implied Warranty of Good and Workmanlike Performance and Habitability in Sale of a new Home

Claims under DTPA: 17.50(a)(3): Breach of Warranty: (1) EWs and IWs under TBCC Chapter 2 (AKA UCC Art 2)

AKA UCC Article 2, any of which Amy for the basis of a DTPA claim, with one important limitation: A consumer may not assert implied warranties under the DTPA against a remote manufacturer.

Claims under DTPA: 17.50(a)(3): Breach of Warranty: (1) EWs and IWs under TBCC Ch 2 - CONSUMER MAY NOT ASSERT IMPLIED WARRANTY UNDER DTPA AGAINST REMOTE MANUFACTURER

A consumer might assert under TBCC/UCC, but not the DTPA. A remote manufacturer's IW is not "in connection with" a consumer's transaction.

Claims under DTPA: 17.50(a)(3): Breach of Warranty: (2) IW of Suitability in Commercial Leaseholds

In any commercial lease, there is an IW that the property will be fit for its intended purposes.

This may be waived--i.e., "as is."

Claims under DTPA: 17.50(a)(3): Breach of Warranty: (3) IW of Good and Workmanlike Performance in Service Contracts

In a contract for the repair or modification of tangible chattels or real estate, there is an implied warranty that the work will be done in a good + workmanlike manner.

May NOT be waived.
Note: No IW for Professional Services

Claims under DTPA: 17.50(a)(4): Insurance Code Chapter 541

The fourth claim that may be brought under DTPA is 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 541 is actionable as a violation of the DTPA. Note that this is not a tie-in STT. The DTPA itself makes a violation of 541 actionable.

Statutory Defenses to DTPA.

There are a few statutory defenses to claims brought under DTPA 17.50(1)-(4). Common law defenses do not apply.

Negation of producing clause
Mediation/Arbitration
No pre-suit notice
Offer of settlement (can limit damages)
Limitations (Discovery Rule)

DTPA Defense (1) Negation of Producing Cause

D may negate producing cause and preclude damages

DTPA Defense (2) Mediation/Arbitration

Either party may compel mediation.
Claims are subject to arbitration.

DTPA Defense (3) Pre-Suit Notice: When Required

Unless filed as a counterclaim, the consumer must give written 60 days before filing suit, which must include (1) nature of the claim and (2) amount of damages.

DTPA Defense (3) Pre-suit Notice: Remedy for failure to give notice

Abatement to give notice. Purpose of notice: Give D a chance to settle

DTPA Defense (4): Settlement - Contents of Settlement

A settlement offer must include an offer to pay the following amounts of money, separately stated:

(1) an amount of money or other consideration reduced to cash value (settlement in kind), as settlement of the consumer's damages; AND
(2) An amount of money to compensate the consumer for the consumer's reasonable attorney's fees incurred as of the date of the offer.

BL: D may offer to settle "in kind," but must reduce it to a cash value.

DTPA Defense (5): Limitations (Discovery Rule)

An action under the DTPA must be commenced (a) within 2 years after the date on which the false, misleading, or deceptive act/practice occurred or (b) within 2 years after the consumer discovered or in the exercise of reasonable diligence should have discovered the occurrence of the false, misleading, or deceptive act or practice.

Test is whether consumer knew or should have known within 2 years; Its use the date of the injury to determine when the consumer should have known.

The question on the page originate from the summary of the following study material:

Consumer Law

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