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Flashcards in DTPA Deck (23):
1

What is the effect of an "AS IS" disclaimer on a consumer's DTPA claim?

Negates the "producing cause" element

2

What is the standard of proof for "mental anguish?"

- Direct evidence of the nature, severity, and duration
- Substantial disruption of daily routine, or high degree of mental pain and distress (more than mere anxiety, embarrassment, etc.)

3

What are some non-UCC warranties that could come up in a DTPA claim?
Which of them may and may not be waived?

- Implied warranty of suitability in commercial leaseholds - may be waived with "AS IS" clause
- Implied warranty of good and workmanlike performance in service contracts - may NOT be waived
- Implied warranty of good and workmanlike performance (sale of NEW home) - can be waived
- Implied warranty of habitability (sale of a NEW home) - may NOT be waived

4

What is the professional services exception?
What is the exception to the exception?

- Can't sue under the DTPA for "professional services"—services based on advice, judgment, or opinion.
- Can still sue a professional for: misrep, failure to disclose, unconscionable acts, breach of warranty (unless any of these can be characterized as "advice, judgment, or opinion")

5

WAIVER OF DTPA

Must be:

WAIVER OF DTPA

Must be:
- Written
- Signed
- Consumer is REPRESENTED BY COUNSEL
- Bold and conspicuous
- Identified by heading: “Waiver of Consumer Rights”

Disclaiming warranties or causation is NOT a waiver of the DTPA (e.g. selling something “as is”)

6

DEFINITION OF CONSUMER

An entity who:

DEFINITION OF CONSUMER

An entity who:
- Seeks or acquires
- Acquire = receives possession
- INCIDENTAL possessors are not consumers (e.g. passenger in someone’s car)
- By purchase or lease
- Includes getting as a gift, as long as the giver purchased
- Tenant is a “consumer” of G/S purchased by the landlord
- Goods or services
- Including real estate

Big businesses ($25M+) are NOT consumers.

7

PROFESSIONAL SERVICES EXEMPTION

DTPA does NOT apply to professional services IF:

NOT exempt, even if a professional does it:

PROFESSIONAL SERVICES EXEMPTION

DTPA does NOT apply to professional services the ESSENCE of which is to provide ADVICE, JUDGMENT, or OPINION.

NOT exempt, even if a professional does it:
- Express misrepresentation of a material fact (that can’t be characterized as prof advice)
- Failure to disclose intended to induce
- Unconscionable act
- Breach of express warranty (that can’t be characterized as prof advice)

8

WHO MAY BE SUED

WHO MAY BE SUED

Someone who sold the goods/services that FORM THE BASIS OF THE COMPLAINT.

D’s wrongful conduct was committed IN CONNECTION WITH consumer.

An AGENT or EMPLOYEE may be INDIVIDUALLY LIABLE, even if acting in representative capacity.

9

LAUNDRY LIST CLAIMS

* Must show _________ *

What are the three basic kinds?

LAUNDRY LIST CLAIMS

* Must show RELIANCE *

Misrepresentations

Failure to disclose

Misrepresentations re legal rights

10

LAUNDRY LIST CLAIMS

Misrepresentations:

LAUNDRY LIST CLAIMS

* Must show RELIANCE *

Misrepresentations
- Statement of FACT (not opinion or puffery)
- False statement
- INTENT OR KNOWLEDGE OF FALSITY NOT REQUIRED

11

LAUNDRY LIST CLAIMS

Failure to disclose:

LAUNDRY LIST CLAIMS

* Must show RELIANCE *

Failure to disclose
- Knowledge of pertinent information
- Non-disclosure
- INTENT TO INDUCE
- Consumer was induced

12

LAUNDRY LIST CLAIMS

Misrepresentations re legal rights:

LAUNDRY LIST CLAIMS

* Must show RELIANCE *

Misrepresentations re legal rights
- Misrep nature of the agreement or rights/remedies available
- Mere breach of K (or good faith, but incorrect interpretation) is not enough

13

UNCONSCIONABILITY

UNCONSCIONABILITY

TAKES ADVANTAGE of a consumer’s lack of knowledge, ability, experience, or capacity to a GROSSLY UNFAIR DEGREE.

DO NOT need to show wrongful intent or ill will.

14

BREACH OF WARRANTY

UCC warranties:

Real estate warranties:
- What are they?
- Which ones can be waived?

BREACH OF WARRANTY

UCC warranties:
- Merchantability
- Fitness
- Express warranties
- Implied warranty of title

Real estate warranties:
- Implied warranty of suitability - COMMERCIAL leaseholds
- CAN be waived
- Implied warranty of good and workmanlike services
- CANNOT be waived
- Implied warranty of habitability - NEW CONSTRUCTIONS
- CANNOT be waived

15

SETTLEMENT

Offer settlement within:

Pitfalls for the consumer who rejects a settlement:

SETTLEMENT

Offer settlement within:
- 60 DAYS of receiving the NOTICE
- 90 DAYS after filing an ANSWER

Pitfalls for the consumer who rejects a settlement:
- If damages end up being about the same as damages found at trial, P takes the LESSER of the settlement offer or the damages found
- If atty fees end up being about the same as actual, P takes the LESSER of the settlement offer or the actual fees

16

SOL

SOL =

____-day EXTENSION IF:

SOL

SOL = 2 years

180-day EXTENSION if D induced P into not filing.

17

PRE-SUIT NOTICE

PRE-SUIT NOTICE

WRITTEN notice

60 DAYS before filing suit

Nature of the claim

Dollar amt for damages

ABATE if not sent—don’t dismiss the lawsuit

18

REMEDIES

THRESHOLD ISSUE:

Economic damages = ?

KNOWINGLY >>>

INTENTIONALLY >>>

What else can you throw in?

REMEDIES

THRESHOLD ISSUE—PRODUCING CAUSE
- P must show that D’s conduct was a PRODUCING CAUSE (“substantial factor”) of P’s injuries
- “AS IS” clause NEGATES producing cause—P cannot recover
- This is not technically a “waiver,” but it has the same effect.

Economic damages
- Pecuniary loss

KNOWINGLY >>> Mental anguish, 3x economic damages

INTENTIONALLY >>> 3x Mental anguish, 3x economic damages

Atty fees

Equitable remedies—injunction, etc.

19

TIE-IN STATUTES

* Triggers ________ DAMAGES *

KNOWINGLY >>>

Most important tie-in for the bar:

TIE-IN STATUTES

* Triggers ACTUAL DAMAGES *
- Any damages recoverable at common law (pain and suffering, mental anguish, etc.)

KNOWINGLY >>> 3x ACTUAL damages

Most important tie-in for the bar: THE TEXAS DEBT COLLECTION ACT

20

INSURANCE CODE

Is this a tie-in statute?

* Applies to:

* _____________ damages

SOL =

Pre-suit notice:

INSURANCE CODE

* This is NOT a tie-in statute. It’s one of the four claims under the DTPA.

* Applies to any PERSON — not just “consumers”

* ACTUAL damages

SOL = 2 years

Pre-suit notice, 60 DAYS

21

INSURANCE CODE

What kinds of claims are available?

MISREPRESENTATIONS re insurance policies

UNFAIR SETTLEMENT PRACTICES

PROMPT PAYMENT OF CLAIMS

22

INSURANCE CODE

UNFAIR SETTLEMENT PRACTICES:

UNFAIR SETTLEMENT PRACTICES
- Failing to attempt in good faith to effectuate a fair and equitable settlement with the insured once liability is reasonable clear
- Includes failure to INVESTIGATE
- Includes denying a claim WITHOUT EXPLANATION (especially if liability is reasonably clear)
- Includes statutory version of STOWERS

23

INSURANCE CODE

PROMPT PAYMENT OF CLAIMS:

PROMPT PAYMENT OF CLAIMS
- Must respond within 15 DAYS
- If accepted, must PAY within 5 DAYS
- PENALTY: 18% plus interest
- Atty fees