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132 Cards in this Set

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How is the DTPA constructed?

Liberally construed to protect consumers against false, misleading, and deceptive business practices, unconscionable actions, and breaches of warranty.

can the DTPA be waived?

Generally, the DTPA may not be waived.

When can the DTPA be waived?

with only a few exceptions, any waiver of the act is contrary to public policy and unenforceable. DTPA may be voided only if



  1. Waiver is in writing and signed by consumer
  2. consumer is not significantly in disparate bargaining position; and
  3. consumer is represented by legal counsel

Who can be a plaintiff under the DTPA?

a consumer

what is a consumer?

An individual or entity who:


  • seeks or acquires
  • by purchase of sale or lease
  • goods or services

What does "seek" mean?

Any entity is a consumer if it in good faiths seeks to purchase goods. There is no requirement to consummate the transaction, or pay for the transaction.

What does acquire mean?

Any entity acquires the goods or services, as those any intended beneficiaries. But an incidental beneficiary may not acquire. The question is whether the objective of transaction was for the benefit of the individual claiming consumer status.

Examples of acquiring goods or services under the DTPA:

  1. A tenant may be a consumer with respect to services purchased by landlord (intended B)
  2. An employee may be a consumer with respect to goods purchased by employer
  3. A purchase of property may be consumer with respect to inspection paid by seller
  4. a passanger riding a car is not a consumer with respect to car
  5. a friend who borrows goods is not a consumer with respect to the goods
  6. a fiance is not a consumer of goods purchased by future husband consumer

What is purchase or Lease?

Truly free services are not subject to DTPA, but purchase is broadly defined, and consumer does not have to be the one who pays.

are gifts "purchased or leased" under the DTPA?

Goods received as gift may still be acquired by purchase. A person who receives a gift is a consumer provided the gift giver purchases the gift.

Examples of "purchased or leased" under DTPA?

  1. A child is a consumer with respect to services paid by parent
  2. person who receives legal services paid by another are purchased
  3. a wife is a consumer with respect to services purchased by husband

What are goods or services under the DTPA?


  1. Goods are tangible things, including real estate
  2. Goods excludes money and intangibles
  3. Services includes insurance
  4. Services exclude merely lending money

What is the rule for banking/financing services?

Merely lending money is not subject to the DTPA. BUT if from the consumer's perspective, the loan is an essential part of the transaction, it is subject to the act.

Are inventory purchased goods for resale goods?

Yes,

What are the exemptions to consumer status?

  1. Business consumer with assets over $25 million
  2. Professional services, subject to the exceptions
  3. Personal injury claims
  4. Large transactions over $100K, and $500K

What is the business consumer exemption to consumer?

The DTPA is not applicable to business consumers with assets over $25 million.



  1. Business consumers are within DTPA, unless
  2. Business consumers with $25 mil assets, excluded
  3. Non-business consumers are included regardless of assets

Business consumer as affirmative defense

The Defendant has the burden to prove the business consumer exception as an affirmative defense.

What is the professional services exemption?

The DTPA does not apply to professional services, the essence of which, is providing



  1. advice
  2. judgment
  3. opinion

What is the key of of the professional services exemption?

The rule is service specific, not profession specific. Therefore, the same person may or may not be providing professional services.




E.g., Realtor may provide services which the essence of is advice, judgment or opinion, and other services that are not in that nature (listing a house).

What are some professions usually exempted of the DTPA under the professional services exemption?

Lawyers, doctors, accountants, architects, and engineers. BUT see exception to exemption

What is the exception, to the professional services exemption of the DTPA

The DTPA exempts certain professional services BUT it does not apply to



  1. Express material representation
  2. Failure to disclose
  3. unconscionable action
  4. Breach of warranty

What are some examples of the exception to the professional services exemption?

  • Doctor tells patient that her nose will look like Madonna's. This is express material misrep
  • Attorney takes unfair advantage of a client's ignorance to a grossly unfair degree. Unconscionable
  • Architect fails to tell client that his license is expired. Failure to disclose
  • Accountant guarantees large return. Breach of warranty

Approach to the professional business service exemption, and its exception

  1. Is there a professional service? advice, judgment, opinion
  2. Do we have a material misrep, unconscionable act, failure to disclose, or breach of warranty?
  3. IF yes, then DTPA applies

What is the personal injury claim exemption to the DTPA?

The DTPA does not apply to personal injury claims, unless



  1. the general damage provision of the DTPA applies to the claim, or
  2. the damage provision for the tie-in statutes apply

What is an example of the personal injury claim exemption:

Breach of warranty led to injury claim. Under 17.50, economic and damages for mental anguish, may be recovered, even if those damages arise out of a personal injury.




So DTPA does not apply to personal injury claims, unless the damages of the DTPA claim arise from a personal injury.

Another example of the personal injury claim exemption?

P went to health club and violation of the Health Spa Act (tie-in) resulted in personal injury. P seeks damages for medical expenses, pain and suffering, mental anguish, and loss of consortium. Under the exemption, he is entitled to recover his actual damages, even if the damages arise from a personal injury claim.

What is the large transaction exemption to the DTPA

The DTPA does not apply to transactions where contract is over 100K IF, contract is in writing signed by consumer, and consumer is represented by legal counsel.




The DTPA does not apply to transactions that are more than $500K, even if there is no signed K, or consumer was not represented.




BOTH of these rules do not apply for Ks for the purchase of residence.

Who may be sued under the DTPA?

  • Any immediate party who deals with the consumer, even if there is no privity with the consumer, so long as the transaction forms the basis of the complaint. Agents, sales agents, etc.

What is the "in connection with" requirement?

It applies to remote parties, or upstream manufacturers. For a remote party to be sued, the misrepresentation of the remote party must have directly reached the consumer. If the misrepresentation reached the consumer, it is in-connection with the transaction. e.g., brochure from manufacturer.

What are the four independent cumulative claims that may be brought under the DTPA?

  1. A claim under the laundry list, relied on by a consumer to the consumer's detriment
  2. breach of warranty
  3. any unconscionable action
  4. Insurance

There is only one single recovery for all claims

Is reliance and detriment necessary for laundry list claim?

Yes, but not for breach of warranty, unconscionable act,or insurance claims.




Reliance may be transferred. E.g., Husband buys gift for wife. Wife is consumer. Gift explodes. Wife has reliance because husband relied on misrep of gift.

What are the most common laundry list practices?

  1. General misrepresentations
  2. misrepresentations about legal rights
  3. failure to disclose

Is there a privity, knowledge, or intent requirement to bring claim under laundry list?

No, claims under laundry list are actionable without regard to privity. There is also no requirement of culpable mental state (knowledge or intent) unless the specific provision requires it.



They are almost like strict liability claims


What is a general misrepresentation?

Any misrepresentation is actionable, unless it is mere puffing, opinion, or vague generalization.

What are examples of general misrepresentations?

  1. misreps regarding coverage of title insurance
  2. misreps that property properly drained
  3. misrep that house complied with housing law
  4. doctor's misrep re benefits of drug
  5. builder's misrep about house quality

Is the parol evidence or statute of frauds applicable?

No. oral misrepresentations are actionable.

What is a misrepresentation regarding legal rights?

Whenever a seller of goods misrepresents the nature of the agreement or the rights and remedies available under the agreement. A mere interpretation of contract is not actionable.

what are examples of misrepresentation regarding legal rights?

  1. misrep that agreement gave seller right to keep some of buyer's money, but it didn't
  2. misrep that landlord had right to enter property and take equipment
  3. misrep regarding right to repossess

What is failure to disclose?

  1. D knew information regarding goods or services
  2. information was not disclosed
  3. there was intent to induce consumer to enter into transaction and
  4. consumer would not have entered into transaction, had the information been disclosed



There is an intent requirement, but no special relationship required.

What is unconscionability under the DTPA?

Act or practice that takes advantage to a grossly unfair degree of the consumer's lack of knowledge.




Unconscionability is determined at the time of the transaction, it is different than unconscionability in UCC or common law.

Does unconscionability require a mental state?

No, it is an objective standard.

What is grossly unfair?

Glaringly noticeable, flagrant, complete and unmitigated

What is a breach of warranty?

Any breach of warranty is actionable under the DTPA. The DTPA is a vehicle to bring warranty claims.

Does the DTPA create any warranties?

No, the warranty must exist in common law or any other law outside the DTPA.

What warranties may be brought under the DTPA?

  1. Express warranty
  2. Implied warranty of merchantibility
  3. Implied warranty of fitness
  4. Implied warranty of suitability in commercial leaseholds
  5. Implied warranty of good and workmanlike in service contracts
  6. Implied warranty of good and workmanlike performance and habitability in sale of new home

May warranties be disclaimed?

Yes, must disclaimer must be conspicuous, or if buyer knew about it.

Can a consumer assert an implied warranty under DTPA against remote manufacturer?

No, as a matter of law, an implied warranty by remote manufacturer is not made in connection with consumer transaction.

What is the implied warranty of suitability in commercial leaseholds?

Any commercial lease gives rise to warranty that the property is suitable for its intended purpose.




This warranty may be waived by ASIS clause

What is the implied warranty of good and workmanlike performance in service contracts?

Any K for repair or modification of existing tangible goods or REAL ESTATE, gives rise to this warranty that the service will be performed in a good and workmanlike manner.

Is there an implied warranty for professional services?

No, there is no warranty of workmanlike performance in professional services.

What is the warranty that arises in the sale of new homes?

Whena new home is built, two warranties are implied:



  1. Good and workmanlike performance--may be waived
  2. Habitability- may not be waived

What is the independent insurance claim that can be brought under the DTPA?

Any violation of Section 541 of the Insurance code. This is not a tie-in statute. IT is one of the DTPA's independent cause of action.

What are some defenses applicable to DTPA claims?

There are very few, and common law defenses do not apply. But DTPA may be defended by



  1. Negating producing cause
  2. Mediation/Arbitration
  3. Pre-suit notice
  4. Settlement offer

How can you negate producing cause?

A party may negate causation and preclude damages under the DTPA. E.g., you can waive producing cause with ASIS waiver

What about mediation and arbitration with relation to DTPA claims?

Either side may file motion to compel mediation.




Also, if the K has arbitration provision, the DTPA is subject to it.

What is the pre-suit notice?

The DTPA requires that as a prerequisite to filing suit, a consumer must give D written notice at least 60 days before filing suit.




IF The notice must contain nature of claim, and dollar amount in damages.





what is the remedy for failure to give notice?

If consumer fails to give notice as required, the defendant may file a plea in abatement.

What is the rule regarding settlement offers?

A D who receives notice, has the right to offer settlement within 60 days after receipt of notice.

What are the requirements of the settlement offer?

The settlement offer must include the dollar amount of the settlement in kind (make repairs, etc); and attorney's fees.

What is the effect of consumer rejecting the settlement offer?

Rejection of a reasonable settlement offer limits a consumer's recovery damages.




If the court finds that the D's offer is the same, or substantially the same, or more than the damages found by trier of facts, the consumer can only recover the lesser of the amounts (the offer, or the damages found). It also precludes punitive damages.

What is the effect of rejection of settlement offer in attorney's fees?

  1. Limits a consumers' attorney's fees. The consumer will be limited to the lesser of the amounts (the offer, or the damages found by jury).

When must a DTPA claim be filed to survive statute of limitations?

within 2 years of the date of injury, or when the consumer should have discovered the injury.

What is producing cause?

Consumer must show that the conduct was the producing cause of the damages. The standard for producing cause is a substantial factor that brings about the injury. It is a low standard

Can you waive producing cause?

Yes, you may negate the producing cause if the K is an ASIS K and consumer is not reling on anything D represented.

What are the damages allowed in a DTPA claim?

The DTPA general damage standard is economic damages. If Defendant acted knowingly, the consumer may recover mental anguish, and up to 3 times the economic damages. If Defendant acted intentionally, the consumer may also recover up to three times economic damages AND mental anguish damages.

What are economic damages?

includes pecuniary loss, cost of repair, replacement, property damage, medical expenses, loss income. BUT it does not include physical pain, and mental anguish, difigurement, physical impairment.

What are mental anguish damages?

If D acted knowingly, the consumer may recover mental anguish damages.

what is "knowingly" under the DTPA?

know, or should have known

What is the standard of proof for mental anguish?

high degree of mental pain and distress, more thanmere worry.




A substnatial disruption in daily routine.




Even if the legal standard is met (D knew or should have known), Plaintiff must proof the high burden of proof of mental anguish.

What are additional damages?

P may recover treble damages when D acted knowingly or intentionally.




Intentional is knowingly plus intent

Can the plaintiff get equitable or injunctive relief?

Yes, in an appropriate case, the plaintiff may also recover equitable and injunctive relief.

Does the DTPA mandate attorney's fees?

Yes, the DTPA mandates award of attorney's fees to a prevailing consumer; or a defendant defending a groundless suit.

When are consumer's attorney's fees awarded?

Award is mandatory when consumer prevails. The standard is reasonable and necessary on an hourly basis in a dollar amount.

When can the defendant get attorney's fees?

when the court finds an action groundless or brought in bad faith, or brought for harassment. The court shall award reasonable and necessary attorney's fees.




groundless= no basis in law or fact


bad faith= malice, ill will


harassment=purpose

When can actual damages, as opposed to economic damages be recovered by plaintiff in DTPA claim?

  1. When claim arises out of personal injury claim
  2. when there is a tie- in statute

what are actual damages?

any damages recoverable at common law, includes mental suffering, pain, etc...

What is the rule regarding damages for tie-in statutes?

Consumer may recover actual damages if DTPA claim is brought through tie-in statute. If D acted knowingly, Plaintiff may recover 3X actual damages.

Who is a debt collector under FDCPA?

FDCPA applies only to 3rd party debt collectors, collecting consumer debt.

what is consumer debt under the FDCPA?

any debt arising out of personal, family, household purposes.

does the FDCPA apply to attorneys?

Yes, if attorney regularly collects consumer debts.

Does the FDCPA apply to creditors collecting their own debt?

No, unless the creditor uses a name other than its own.




A creditor is usually not subject to the FDCPA, unless using a different name.

when and where can debt collector communicate with debtor?

debt collector may not communicate with consumer at any unusual time or place.




Cannot communicate before 8am, or after 9 pm

What if consumer debtor is represented by attorney?

Unless attorney consents, collector cannot contact the consumer.



can collector call debtor at employment?

Once collector knows that employer prohibits calls from collectors, he cannot call employment to collect.

when can collector communicate with third parties?

Generally, a collector can only communicate with consumer. But a collector may communicate with third parties to obtain location information about the debtor.

When must a collector validate a debt?

  1. in the initial communication, or
  2. within five days of initial communication

The collector must inform the debtor the amount of the debt, the name of the creditor, and tht the consumer has a right to dispute within 30 days

what if consumer disputes the debt?

the collector has to stop all communications until debt is verified.

What are the prohibited conducts under the FDCPA?

  1. harassment or abuse
  2. false or misleading representations
  3. unfair or unconscionable practices

Very broad prohibitions that apply to any conduct that is within the statute, but not mentioned within each

who can bring an FDCPA claim?

  1. FTC or
  2. private enforcement

What is the statute of limitations for FDCPA claims?

1 year from the date of violation

what are the damages resulting from FDCPA liability?

Debt collector who violates FDCPA is liable for actual damages + statutory damages, even if no actual damages up to 1K

when can debtor consumer recover attorney's fees under FDCPA?

when consumer prevails he may recover reasonable and necessary attorney's damages

When can defendant recover attorneys' fees under FDCPA?

if court finds that claim was brought in bad faith and for purpose of harassment

What governs wrongful date collection in Texas?

common law and TDCA

what is the common law claim for wrongful debt collection?

wrongful debt collection. All tort damages are available under tort.

is the TDCA a tie- in statute?

duh

Who is a debt collector under the TDCA?

Any person, collecting consumer debt.




It is broader than FDCPA, which limits it to third party debt collectors.

what is consumer debt under TDCA?

debt for personal, family, or household purposes-same as FDCPA

What are the prohibited conducts under the TDCA?

The list is exclusive. The conduct is not listed in the statute, it is not a violation.





  • Threats or coercion.
  • harassment or abuse
  • unfair and unconscionable conduct
  • fraudulent deceptive or misleading reps

What are the exclusive list of threats or coercion?

  1. threats of arrest
  2. to take illegal action
  3. garnish wages
  4. take exempt property



What is allowed?


informing that debtor may be arrested after proper court proceedings, threating lawsuits, threats of rep

What are the exclusive harassment and abuse conducts?

using profanity, and annoying using phone calls (not emails)

What are the exclusive unfair or unconscionable practices?

attempting to collect unauthorized amounts.

what are the exclusive fraudulent, deceptive, or misleading reps?

  1. misleading or using deceptive names
  2. deceiving to get information
  3. misrepresenting consquences of not paying
  4. misrep that you are an attorney

What are the remedies under the TDCA?

actul damages, and injunctive relief



when can person get attorney's fees?

consumer= reasonable and necessary


defendant= bad faith or harassment

what is the minimum recovery under TDCA?

generally no punitive damages are allowed, but sometimes you can get $100 per violation

TDCA as tie-in statute?

A violation of the TDCA is a deceptive trade prctice, and actionable under DTPA?

what is the major benefit of using a tie- in statute to bring a DTPA claim?

that the damages are measured by the actual damages, not economic damages

what are the 3 possible claims that can be brought using a tie-in statute?

  1. violation of the TDCPA- get actual damages without punitive
  2. violation of pure DTPA- economic and maybe mental anguish
  3. tie-in through DTPA- get actual damages and maybe up to 3X if knowingly

What is insurance law dealing with?

contract between insurer, who assumes risk from another party, the insured.

what is the objective of section 541 of the insurance code?

protect against unfair and deceptive acts in business insurance.

what is the scope of section 541?

almost identical to DTPA, but two main differences:



  1. applies to any person, not just consumers
  2. it prohbits certain practices relating to insurance

what are unfair methods of competition and decption?

protects insurance companies against anti-competitive acts and practices

what are misrepresentations and false advertising?


p

prohibits misreps by agent of company

what about defamation?

prohibits company from defaming a competitor

what is the principle of unfair discrimination?

prohibits discrimination against people of the same insurance risk and class

what are unfair settlement practices?

this is statutory bad faith


failing to attempt in good faith to affectuate a prompt, fair and equitable settlement with injured party after liability is reasonably clear.

what is misrepresentations of insurance policy?

misrepresenting an insurance policy by making untrue statement of material fact.

what is the relief available to injured persons?

Section 541 allows a private cause of action fo violation of the provision. Actual damages are recoverable.

what are the 3 causes of cation that may arise from section 541?

  1. pure 541 action under insurance code
  2. pure DTPA action for misrep
  3. Section 541 based on DTPA
  4. DTPA based on section 541

What is prompt payment of claims?

an action by lawyer to get insurance co to pay promptly

what is the notice of claim requirement?

insurer must repond to claim no later than the 15th day after receipt



What is the acceptance or rejection of claim requirement?

Insurer shall notify claimant of acceptance or writing within 15 days after insurer gets all items



what if insurer is unable to accept?

can extend for up to 45 days

What if insurer fails to accept or reject?

insurer shall pay statutory damages

when should insurer pay claim?

payment must be made within 5 days of acceptance or statutory payment

what are the damages resulting for violation?

violation results in penalty of 18% annual interest and attorney's fees.

what is the common law duty of good faith?

an insurer has the common law duty to exercise good faith and fair dealing with insured. Failure to do so is a tort.

when is there a breach of good faith?

when insurer when it fails to attempt in good faith to effectuate a prompt, fair, and equitable settlement. same as statutory duty, but you can recover tort damages.

what is the rule regarding bona fide disputes?

if there is a bona fide dispute about coverage, denial of claim will not be in bad faith.

what is the stowers doctrine?

If claimant offers to settle insurer for policy limit when liability is reasonably clear, insured has duty to setltle.

What is the result of refusal to settle?

Wrongful refusal violates the insurer's duty of good faith and subject insurer to liability for the damages in excess of the policy.