CONSUMER TRANSACTIONS
DTPA Introduction
· Elements of a DTPA Cause of Action
o Plaintiff must be a consumer
o Defendant has committed one of the following violations:
§ False, misleading, or deceptive act or practice that is:
· Laundry List Violations and
· Relied on by a consumer to his detriment
§ Breach of express or implied warranty
§ Unconscionable action
§ Violation of Insurance Code
o Defendant’s action was a producing cause of the consumer’s damages
· Consumer Plaintiff
o Definition – individual, partnership, corporation, this state, or a subdivision or agency of this state who seeks or acquires by purchase or lease, any goods or services
§ does not include a business consumer that has assets of or is owned or controlled by a corporation or entity with assets of $25 million or more
o Elements
§ plaintiff must have sought or acquired goods or services by purchase or lease and
§ goods or services purchased or leased must form the basis of the complaint
o Seek or Acquire
§ Must be the person’s intent/objective to purchase or lease the goods or services
§ Must in good faith initiate the purchasing process – is done when the consumer:
o Presents himself to seller as a willing buyer with the subjective intent or specific objective of purchasing, and
o Possesses some credible indicia of the capacity to consummate the transaction.
· Good faith has been defined as:
o Honesty in fact in the conduct or transaction occurred
o The actual belief of the party and not the reasonableness of that belief.
§ Seller may attempt to rebut buyer’s claim of consumer status
· If a challenge is made – trier of fact must review the evidence and decide
§ Transfer of valuable consideration is not required
o Purchase or Lease
§ What matters is plaintiff’s relationship to the transaction, not his contractual relationship with the defendant
· Employee claiming misrepresentations in a group insurance policy is a consumer even though it is the employer who purchased the policy – he was intended beneficiary
· Third party is a consumer – if he was primary intended beneficiary
o but not if he derived only an incidental benefit
§ Consideration – includes any bargained-for exchange, and is not limited to money
§ Some gifts can be purchased:
· Consumer receives offer for a “free TV” if consumer attends a sales presentation – consumer has purchased the TV because he agreed to sit through a presentation in exchange for the TV
§ No actual transfer of consideration required
· No requirement that the consumer be the one who pays for the purchase or lease
o payment may be made by another, as long as consumer is the one who acquired the goods through purchase for his benefit
· Principals can be consumers for the purchases of their agents
o Goods or Services
§ Goods – tangible chattels or real property purchased or leased for use
§ Services – work, labor, or service purchased or leased for use, including services furnished in connection with the sale or repair of goods
§ What Is a Good or Service
· Transactions where sole object of the transaction is the purchase of an intangible – no consumer status
o Securities transactions are not goods or services because they are not tangible
· Combination of tangible and intangible – purchasing an intangible percentage of a tangible good is a purchase of a good
o The DTPA applies to mixed purchases of goods and services
· Lottery tickets are not goods or services – merely a right to participate in a drawing
· Money
o Borrowing money (loans or extensions of credit) by itself is not a good or service
o If state what are using the money for, then it can be considered a good or service as long as the borrowing is not the basis of the complaint
· Goods bought for resale constitute goods or services because they are for use
o Business Consumer
§ Can have consumer standing as long as it:
· Does not have assets of $25 million or more or
· Is not owned or controlled by a corporation or entity with assets of $25 million or more
§ Defined as an individual, partnership, or corporation who seeks or acquire
terized as an affirmative defense that must be pleaded
o Personal Injury Exemption – DTPA does not apply to personal injury damages or for the infliction of mental anguish unless:
§ Damages are economic
· Economic damages means – compensatory damages for pecuniary loss, including costs of repair and replacement (ex. hospital expenses, lost wages)
o Does not include exemplary damages or damages for physical pain and mental anguish, loss of consortium, disfigurement, physical impairment, or loss of companionship
§ If trier of fact finds the defendant’s conduct was committed knowingly – can also get mental anguish damages
· Knowingly means – actual awareness at the time of the act or practice complained of
o Actual awareness may be inferred where objective manifestations indicate that a person acted with actual awareness
§ There is a tie-in statute
· Consumer is entitled to recover actual damages (including all damages for personal injury) whenever the claim is brought through a tie-in statute
· Tie-in statutes are those laws that cross-reference the DTPA and make a violation of that statue actionable through the DTPA
· Examples of tie-in statutes:
o Home Solicitation Transactions
o Business Opportunity Act
o Telephone Solicitation Act
o Health Spa Act
o Transactions Exempted
§ DTPA does not apply to claims if
· The transaction is between $100,000 and $500,000 and consumer was represented by a real lawyer.
· The transaction is over $500,000 regardless of legal representation
§ DTPA still applies if
· Regardless of amount or representation, the transaction was pertaining to the consumer’s residence.
