General Practice, Solo and Small Firm Section of the State Bar of Texas

                                                                                                                          CONSUMER LAW

                                                                                                                                            Fall 2018



USAA Tex. Lloyds Co. v. Menchaca, 545 S.W.3d 479, (Tex. 2018) (opinion on rehearing)


Insurance Policy Benefits Are Recoverable as Damages Under Insurance Code Chapter 541, Even Without Finding of Breach of Contractual Duty to Pay Benefits: In April 2017, The Supreme Court of Texas issued its first opinion in this case, breathing new life into the DTPA’s sister statutory cause of action in Texas Insurance Code Chapter 541 for unfair and deceptive insurance practices. On rehearing, the Court withdrew its previous opinion.  Even so, as in its original 2017 opinion, the Court unanimously reaffirmed Vail v.Texas Farm Bureau Mut. Ins. Co., 754 S.W.2d 129, 136 (Tex. 1979), holding that an insured can recover policy benefits as damages for an insurer’s violation of Chapter 541. Intervening decisions from the Court had cast doubt on the continued viability of Vail. The Court clarified that the Chapter 541 violation must cause the loss of those policy benefits and is not a substitute for coverage when no coverage otherwise exists under the policy.


Apple-Sport Chevrolet, Inc. v. Rolston, 2018 Tex. App. LEXIS 3716, W.L. 2346198 (Tex. App.—Waco 2018)


Auto Mechanic Is Not Entitled to Professional Exemption from DTPA; Additional DTPA Damages Are Limited to Two Times Economic Damages: Plaintiff Rolston took his vehicle to Defendant Apple for repairs. On July 29, 2014, Apple advised Rolston the vehicle was repaired and presented him a bill for $706.21.  Apple also represented more repairs were advisable, but Rolston apparently declined to have them done.   Rolston drove the car from the shop.  After about 10 miles, his vehicle stopped running. Rolston had it towed to another repair shop.  At trial, the jury found Apple liable for unconscionable conduct and one or more laundry list violations, all of which were committed knowingly.  The trial court rendered judgment awarding Rolston economic damages, treble damages and attorney’s fees. On appeal, Apple argued that it was entitled to the professional services exemption from DTPA liability found in DTPA Section 17.49(c) because its mechanics were only offering opinions about the condition of the vehicle based upon their judgment and skill.  Held: Affirmed as modified, conditioned on remittitur.  The Waco Court rejected the suggestion that the essence of the services of Apple’s automobile mechanics was based on “providing advice, judgment, or opinion,” as required to come within the exemption from DTPA liability in Section 17.49(c).  The Court believed the mechanics’ work was more appropriately characterized as physical labor. 


Separately, in modifying the trial court’s damages award, the Court ordered a remittitur of a portion of Rolston’s additional damages, finding that the trial court’s award of treble additional damages effectively quadrupled Rolston’s recovery.  Without comment on the on-going debate on whether the 1995 amendments to the DTPA now provide for quadruple damages (see, e.g., Note and Comment: Not More than Dicta? Whether the DTPA's Additional Damages Can Quadruple Economic and Mental Anguish Damages under Tony Gullo Motors I, L.P. v. Chapa, 63 Baylor L. Rev. 934),  the Waco Court found that “quadrupling of Rolston’s actual damages . . . would violate the DTPA’s damages scheme.” Note: This holding is at odds with Hulcher Servs. v. Emmert Indus. Corp., Tex. App.—Fort Worth 2016, pet. den’d.) (awarding additional damages of $576,000 together with economic damages of $192,000), and dicta in Lin v. Metro Allied Ins. Agency, Inc., 305 S.W.3d 1 (Tex. App.—Houston [1st Dist.] 2007), rev'd on other grounds, 304 S.W.3d 830 (Tex. 2009) (“The jury  . . . could have awarded [additional damages] up to [3 times economic damages] for the knowing violation and still fallen within the statutory guidelines.”).  The Waco Court did not mention its previous decision in Bossier Chrysler-Dodge II, Inc. v. Riley, 221 S.W.3d 749, 759 (Tex. App.—Waco 2007, pet. denied), where it observed in dicta that if the plaintiff proves the defendant acted knowingly, the plaintiff may recover economic damages and additional damages of up to three times economic damages).


Landing Cmty. Improvement Ass’n. v. Young, 2018 Tex. App. LEXIS 3602, W.L. 2305540 (Tex. App.—Houston [1st Dist.] 2018)


Victim of Unreasonable Debt Collection Is Not Entitled to Recovery for Intentional Infliction of Emotional Distress Because Common Law Tort of Unreasonable Debt Collection Is Recognized as a Separate and Distinct Common Law Tort:  Young owned a house in a residential subdivision governed by deed restrictions enforced by the Defendant homeowners association.  After multiple demands and threats of litigation, the Association brought suit against Young to collect past due assessments.  Young counterclaimed for damages caused by the Association’s collection efforts.  The jury found in favor of Young on this intentional infliction of emotional distress claim and awarded him $100,000 in damages.  The trial court entered judgment confirming that award (among other relief granted).  On appeal, the Association argued that the tort of intentional infliction of emotional distress was not available to Young.  Held: Reversed and remanded. The tort of intentional infliction of emotional distress is a “gap-filler tort” and is available only in the rare instances in which no other tort or statutory remedy is available.  The Houston Court of Appeals held that a separate tort of unreasonable debt collection practices exists and was available to Young.  Recovery under this common law tort theory is appropriate when the defendant’s conduct is shown to be “willful, wanton, malicious and intended to inflict mental anguish and bodily harm.”  As such, the tort of intentional infliction of emotional distress was not available to Young, and his recovery under that theory was disallowed.





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