Consumer Law Barbri 2015

Front 1

How is the DTPA constructed?

Back 1

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

Front 2

can the DTPA be waived?

Back 2

Generally, the DTPA may not be waived.

Front 3

When can the DTPA be waived?

Back 3

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

Front 4

Who can be a plaintiff under the DTPA?

Back 4

a consumer

Front 5

what is a consumer?

Back 5

An individual or entity who:

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

Front 6

What does "seek" mean?

Back 6

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.

Front 7

What does acquire mean?

Back 7

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.

Front 8

Examples of acquiring goods or services under the DTPA:

Back 8

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

Front 9

What is purchase or Lease?

Back 9

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

Front 10

are gifts "purchased or leased" under the DTPA?

Back 10

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.

Front 11

Examples of "purchased or leased" under DTPA?

Back 11

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

Front 12

What are goods or services under the DTPA?

Back 12

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

Front 13

What is the rule for banking/financing services?

Back 13

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.

Front 14

Are inventory purchased goods for resale goods?

Back 14

Yes,

Front 15

What are the exemptions to consumer status?

Back 15

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

Front 16

What is the business consumer exemption to consumer?

Back 16

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

Front 17

Business consumer as affirmative defense

Back 17

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

Front 18

What is the professional services exemption?

Back 18

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

1. advice
2. judgment
3. opinion

Front 19

What is the key of of the professional services exemption?

Back 19

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).

Front 20

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

Back 20

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

Front 21

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

Back 21

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

Front 22

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

Back 22

• 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

Front 23

Approach to the professional business service exemption, and its exception

Back 23

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

Front 24

What is the personal injury claim exemption to the DTPA?

Back 24

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

Front 25

What is an example of the personal injury claim exemption:

Back 25

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.

Front 26

Another example of the personal injury claim exemption?

Back 26

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.

Front 27

What is the large transaction exemption to the DTPA

Back 27

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.

Front 28

Who may be sued under the DTPA?

Back 28

• 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.

Front 29

What is the "in connection with" requirement?

Back 29

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.

Front 30

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

Back 30

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

Front 31

Is reliance and detriment necessary for laundry list claim?

Back 31

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.

Front 32

What are the most common laundry list practices?

Back 32

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

Front 33

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

Back 33

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

Front 34

What is a general misrepresentation?

Back 34

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

Front 35

What are examples of general misrepresentations?

Back 35

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

Front 36

Is the parol evidence or statute of frauds applicable?

Back 36

No. oral misrepresentations are actionable.

Front 37

What is a misrepresentation regarding legal rights?

Back 37

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.

Front 38

what are examples of misrepresentation regarding legal rights?

Back 38

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

Front 39

What is failure to disclose?

Back 39

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.

Front 40

What is unconscionability under the DTPA?

Back 40

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.

Front 41

Does unconscionability require a mental state?

Back 41

No, it is an objective standard.

Front 42

What is grossly unfair?

Back 42

Glaringly noticeable, flagrant, complete and unmitigated

Front 43

What is a breach of warranty?

Back 43

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

Front 44

Does the DTPA create any warranties?

Back 44

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

Front 45

What warranties may be brought under the DTPA?

Back 45

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

Front 46

May warranties be disclaimed?

Back 46

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

Front 47

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

Back 47

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

Front 48

What is the implied warranty of suitability in commercial leaseholds?

Back 48

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

This warranty may be waived by ASIS clause

Front 49

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

Back 49

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.

Front 50

Is there an implied warranty for professional services?

Back 50

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

Front 51

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

Back 51

Whena new home is built, two warranties are implied:

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

Front 52

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

Back 52

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.

Front 53

What are some defenses applicable to DTPA claims?

Back 53

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

Front 54

How can you negate producing cause?

Back 54

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

Front 55

What about mediation and arbitration with relation to DTPA claims?

Back 55

Either side may file motion to compel mediation.

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

Front 56

What is the pre-suit notice?

Back 56

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.

Front 57

what is the remedy for failure to give notice?

Back 57

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

Front 58

What is the rule regarding settlement offers?

Back 58

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

Front 59

What are the requirements of the settlement offer?

Back 59

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

Front 60

What is the effect of consumer rejecting the settlement offer?

Back 60

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.

Front 61

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

Back 61

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).

Front 62

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

Back 62

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

Front 63

What is producing cause?

Back 63

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

Front 64

Can you waive producing cause?

Back 64

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

Front 65

What are the damages allowed in a DTPA claim?

Back 65

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.

Front 66

What are economic damages?

Back 66

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.

Front 67

What are mental anguish damages?

Back 67

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

Front 68

what is "knowingly" under the DTPA?

Back 68

know, or should have known

Front 69

What is the standard of proof for mental anguish?

Back 69

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.

Front 70

What are additional damages?

Back 70

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

Intentional is knowingly plus intent

Front 71

Can the plaintiff get equitable or injunctive relief?

Back 71

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

Front 72

Does the DTPA mandate attorney's fees?

Back 72

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

Front 73

When are consumer's attorney's fees awarded?

Back 73

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

Front 74

When can the defendant get attorney's fees?

Back 74

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

Front 75

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

Back 75

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

Front 76

what are actual damages?

Back 76

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

Front 77

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

Back 77

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

Front 78

Who is a debt collector under FDCPA?

Back 78

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

Front 79

what is consumer debt under the FDCPA?

Back 79

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

Front 80

does the FDCPA apply to attorneys?

Back 80

Yes, if attorney regularly collects consumer debts.

Front 81

Does the FDCPA apply to creditors collecting their own debt?

Back 81

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.

Front 82

when and where can debt collector communicate with debtor?

Back 82

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

Cannot communicate before 8am, or after 9 pm

Front 83

What if consumer debtor is represented by attorney?

Back 83

Unless attorney consents, collector cannot contact the consumer.

Front 84

can collector call debtor at employment?

Back 84

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

Front 85

when can collector communicate with third parties?

Back 85

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

Front 86

When must a collector validate a debt?

Back 86

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

Front 87

what if consumer disputes the debt?

Back 87

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

Front 88

What are the prohibited conducts under the FDCPA?

Back 88

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

Front 89

who can bring an FDCPA claim?

Back 89

1. FTC or
2. private enforcement

Front 90

What is the statute of limitations for FDCPA claims?

Back 90

1 year from the date of violation

Front 91

what are the damages resulting from FDCPA liability?

Back 91

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

Front 92

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

Back 92

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

Front 93

When can defendant recover attorneys' fees under FDCPA?

Back 93

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

Front 94

What governs wrongful date collection in Texas?

Back 94

common law and TDCA

Front 95

what is the common law claim for wrongful debt collection?

Back 95

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

Front 96

is the TDCA a tie- in statute?

Back 96

duh

Front 97

Who is a debt collector under the TDCA?

Back 97

Any person, collecting consumer debt.

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

Front 98

what is consumer debt under TDCA?

Back 98

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

Front 99

What are the prohibited conducts under the TDCA?

Back 99

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

Front 100

What are the exclusive list of threats or coercion?

Back 100

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

Front 101

What are the exclusive harassment and abuse conducts?

Back 101

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

Front 102

What are the exclusive unfair or unconscionable practices?

Back 102

attempting to collect unauthorized amounts.

Front 103

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

Back 103

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

Front 104

What are the remedies under the TDCA?

Back 104

actul damages, and injunctive relief

Front 105

when can person get attorney's fees?

Back 105

consumer= reasonable and necessary

defendant= bad faith or harassment

Front 106

what is the minimum recovery under TDCA?

Back 106

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

Front 107

TDCA as tie-in statute?

Back 107

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

Front 108

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

Back 108

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

Front 109

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

Back 109

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

Front 110

What is insurance law dealing with?

Back 110

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

Front 111

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

Back 111

protect against unfair and deceptive acts in business insurance.

Front 112

what is the scope of section 541?

Back 112

almost identical to DTPA, but two main differences:

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

Front 113

what are unfair methods of competition and decption?

Back 113

protects insurance companies against anti-competitive acts and practices

Front 114

what are misrepresentations and false advertising?

p

Back 114

prohibits misreps by agent of company

Front 115

what about defamation?

Back 115

prohibits company from defaming a competitor

Front 116

what is the principle of unfair discrimination?

Back 116

prohibits discrimination against people of the same insurance risk and class

Front 117

what are unfair settlement practices?

Back 117

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.

Front 118

what is misrepresentations of insurance policy?

Back 118

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

Front 119

what is the relief available to injured persons?

Back 119

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

Front 120

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

Back 120

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

Front 121

What is prompt payment of claims?

Back 121

an action by lawyer to get insurance co to pay promptly

Front 122

what is the notice of claim requirement?

Back 122

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

Front 123

What is the acceptance or rejection of claim requirement?

Back 123

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

Front 124

what if insurer is unable to accept?

Back 124

can extend for up to 45 days

Front 125

What if insurer fails to accept or reject?

Back 125

insurer shall pay statutory damages

Front 126

when should insurer pay claim?

Back 126

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

Front 127

what are the damages resulting for violation?

Back 127

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

Front 128

what is the common law duty of good faith?

Back 128

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

Front 129

when is there a breach of good faith?

Back 129

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.

Front 130

what is the rule regarding bona fide disputes?

Back 130

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

Front 131

what is the stowers doctrine?

Back 131

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

Front 132

What is the result of refusal to settle?

Back 132

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