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Consumer Law Flashcards

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1
Q

What does DTPA stand for?

A

Texas Deceptive Trade Practices Act

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2
Q

What is the purpose of the DTPA

A

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

to provide efficient/economical procedures to secure such protections

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3
Q

Can the DTPA be waived?

A

generally no.

can be waived only if:

  1. in writing, signed by consumer
  2. consumer not in significantly disparate bargaining position
  3. consumer represented by legal counsel in seeking/getting goods or service
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4
Q

DTPA only applies to Consumers. What is a Consumer?

A

an individual, partnership, corp., state or subdivision/agency who seeks or acquires by purchase or lease goods/services

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5
Q

Can a Business be a Consumer?

A

yes, but it won’t include a business with 25+ mil in assets (or owned/controlled by a corp/entity with that much in assets)

D has burden to prove business consumer exception as affirmative defense

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6
Q

DTPA only applies to consumers who seek/acquire goods/services for purchase/lease. What does it mean to seek or acquire?

A

seek/acquire: any purchase or good faith attempt to purchase

no requirement to pay/consummate the transaction

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7
Q

DTPA only applies to consumers who seek/acquire goods/services for purchase/lease. What are goods or services?

A

Goods: tangible chattels or real property (not lending money/intangibles), including items for resale (inventory)

Services: work, labor, service, repair, sale, insurance (not merely lending money)

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8
Q

DTPA only applies to consumers who seek/acquire goods/services for purchase/lease. What does purchase or lease mean?

A

(anything free doesn’t count)

purchase: broadly defined and consumer doesn’t have to be the one to pay

  • kid is consumer for services paid by parent
  • person who gets legal services paid for by another is consumer
  • wife is consumer for services of husband

test: did person claiming to be consumer get goods/services by purchase

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9
Q

Who acquires the goods when they seek/acquire (so as to be considered a consumer)

A
  1. the purchaser
  2. any intends beneficiaries of the purchaser
    - tenant can be consumer for services bought by landlord
    - employee can be consumer for goods bought by employer
    - property buyer can be consumer for inspection paid by seller
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10
Q

Who does NOT acquire the goods when someone else seek/acquires (so they are not considered consumers)

A

incidental beneficiaries

  • passenger riding in car is not consumer of car
  • friend who borrows things
  • employee who occasionally uses a good
  • fiance of consumer not consumer for goods
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11
Q

When Lending money could be subject to DTPA

A

typically just lending money is not subject to DTPA

But: if from consumer’s prospective, the loan is an essential part of the transaction it’s in the act (ex; must get loan to buy car)

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12
Q

Statutory Exceptions to the DTPA

A
  1. doesn’t apply to newspapers that publish ads w/o knowledge they are false, misleading, deceptive
  2. doesn’t apply to act/practice authorized by FTC
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13
Q

Professional Service Exception to the DTPA (1995)

A
  1. doesn’t apply to claim for damages based on professional service-essence of which is providing advice, judgment, opinion, professional skill
    ex: lawyers, doctors, accounts, engineers
    compare: real estate broker listing house (covered) v. giving sales ideas and appraisal (not covered)
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14
Q

Exceptions to the Professional Service Exception to the DTPA

A

this exemption keeping professional service out of the DTPA doesn’t apply to:

  1. express misrep. of material fact (not advice/judgment)
  2. failure to disclose info
  3. unconsc action (not advice/judgment)
  4. breach of express warranty (ex: dr. telling patient nose will look like Monroe’s)
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15
Q

Personal Injury Claim and the DTPA (1995)

A

ex: Take care to get fixed, they don’t, it crashes, you’re hurt. Claim under DTPA can recover:
- economic loss including value of care and medical

-mental anguish only if est. car ppl acted knowingly

but can get damages from personal injury from tie in stat (then get all damages alleged)

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16
Q

Large Transactions and the DTPA (2)

A
  1. Written contracts with consideration of 100K or more DTPA doesn’t apply (not residences)
  2. DTPA doesn’t apply to a cause of action from transaction involving total of 500K all the time
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17
Q

Who can the consumer sue under the DTPA?

A

anyone who violates the act. no privity is required as long as goods/services is basis of complaint

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18
Q

Who CAN’T the consumer sue under the DTPA?

A

remote parties: upstream manufacturers or suppliers not a party to the sale

to be actionable, the violation of the act must be in connection with the consumer’s transaction

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19
Q

The 4 Claims under the DTPA

A

They are separate but cumulative (one recovery):

  1. use/employment of false, misleading, deceptive act/practice. that is:
    - -specific issue on the laundry list and
    - -relied on by consumer to consumer’s detriment
  2. Breach of express/implied warranty
  3. unconscionable act/course of action
  4. Use/employment of act/practice in violation of insurance code
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20
Q

Laundry List

A

a claim under the DTPA made up of 27 acts/practices deemed false, deceptive, misleading

Most Common:

  1. genearl misrep.
  2. MIsrep. about the law
  3. Failure to disclose
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21
Q

Reliance Required by the Consumer to bring claim under the DTPA

A

reliance must be by any consumer to the consumer’s detriment

means there can be more than one consumer.

ex: H relies on salesmen’s misrep. buys something for W and it damages property, H and W both consumers, can both bring claim

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22
Q

Is Privity or Knowledge required for a laundry list violation?

A

no, laundry list is actionable w/o regard to privity

violation can occur prior to, simultaneous w/, or after contract formed

knowledge/intent is not required for laundry list violation (unless the particular violation requires it)

ex: didn’t know of problem and didn’t mean to misrep., doesn’t matter-still laundry list violation

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23
Q

General Misrepresentation, a Laundry List Violation under the DTPA

A

it’s only necessary that the actor makes a representation of facts regarding goods/services that is inaccurate of false

  • statement can be oral or written
  • statement that are just opinions/puffing/vague generalizations are not actionable

ex:
- misrep regarding coverage of title insurance
- misrep that the property drains
- misrep the house complies with code

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24
Q

Does Parole Evidence Rule and SoF apply to the DTPA?

A

Nope

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25
Misrepresentations Regarding Legal Right, a Laundry List Violation under the DTPA
misrep of legal rights is actionable but a valid contract interpretation by a lawyer is not ex: - misrep that layaway gave seller rights to get money back - landlord misrep of right to enter/take things - misrep regarding right to tow car
26
Failure to Disclose, a Laundry List Violation under the DTPA (4 elements)
consumer must est. 4 elements: 1. D knew info regarding the goods/services 2. info was not disclosed 3. intent to induce the consumer to enter transaction 4. consumer would not have entered transaction on same terms if info been disclosed No need for any sort of special relationship
27
Breach of Warranty, a Claim under the DTPA
any breach of warranty is actionable by the consumer under the DTPA the DTPA doesn't create any warranties outside of what already exists doesn't work if warranty has been properly disclaimed
28
Most Common Warranties brought under DTPA | 4
1. All express/implied warranties under Art. 2 UCC - but not against remote manufacturer, remember 2. implied warranty of suitability in commercial leases - that the lease will fit it's purpose - can be waived 3. Implied warranty of good/workmanlike performance in service contract - may not be waived 4. Implied warranty of good/workmanlike performance and habitability in sale of new home - 2 separate warranties - workmanlike can be waived - habitability can't (no implied warranty for professional services)
29
Chapter 541, Insurance Code Claim, Claim under DTPA
use or employment of act/practice in violation of that chapter is actionable under DTPA not considered a tie in statute
30
Consumer Must give notice of claim under DTPA
unless filed as counter claim consumer must give written notice 60 before filing: - nature of claim - amount of damages (not mandatory for class actions)
31
Remedy, if consumer fails to give adequate notice of claim under DTPA
adequate notice is 60 days before filing (containing nature of claim and damages sought) if doesn't give that, abatement to allow notice
32
Why Notice of claim under DTPA is important | what must be included in settlement offer
notice of claim under DTPA is important to give D a chance to offer settlement settlement offer must include: - any offer to pay money (cash value) for damages - amount to compensate consumer for attorney fees
33
Effect of Consumer Rejecting Settlement offer (after consumer gives notice of his claim under DTPA)
reasonable rejection of settlement limits consumer's recovery if settlement offer same/substantially/more than damages found by trier of fact, consumer can only get lesser of: - amount damages in settlement offer - amount found by trier precludes punitive damages limits consumer's attorney fees
34
When must an Action under the DTPA be filed?
must commence w/in 2 years after date on which false/misleading/deceptive practice occurred or w/in 2 years of consumer discovering it/should have discovered it courts use date of injury to determine when consumer should have discovered act
35
To Bring a Cause under the DTPA consumer must show causation:
Producing Cause: substantial factor which bring about injury and w/o which injury would not have occurred
36
As Is
a way for seller to negate damages you can negate causation with contract that says as is/no reliance
37
Damages a Consumer can Get (if he wins a DTPA claim)
economic damages and sometimes mental anguish. never more than 3x damages
38
Economic Damages (general damage standard under DTPA)
compensatory lose for pecuniary damages, including cost of repair/replacement NOT: - physical pain/anguish - loss of consortium, disfigurement, physical impairment - loss of companionship/society
39
Mental Anguish Recover Under the DTPA | 2 things consumer must prove
1. only if trier of fact finds D committed act knowingly, can consumer get mental anguish damages 2. also must prove substantial disruption of daily routine or high degree of mental pain/distress (more than mere worry, anxiety, embarrassment/anger)
40
What is 'Knowingly' for the DTPA
(must prove to get mental anguish damages) actual awareness, at time of act/practice complained of, of the falsity, deception, unfairness or breach of warranty can be inferred if knew or should have know (objective or subjective)
41
What Happens if the Trier of Fact finds D acted knowingly in a DTPA Claim?
allowed to recover mental anguish damages also allowed to recover not more than 3x economic damages
42
what happens if the trier of fact finds D acted intentionally in a DTPA claim?
allowed to recover not more than 3x damages for mental anguish and economic damages
43
what is 'intentional' for the DTPA?
knowingly + intent
44
How does DTPA try to stop frivolous lawsuits?
by giving attorney's fees to D when the suit is: groundless or brought in bad faith or brought for the purpose of harassment
45
Consumer attorney fees in the DTPA
awarded court cost and reasonable/necessary attorney fees award mandatory, amount discretionary on hourly basis
46
Defendant's attorney fees in the DTPA
(only the DTPA does this) reasonable/necessary amount of attorney fees/court cost hourly basis
47
What is 'actual' damages?
everything. all damages recoverable at common law
48
How do you recover actual damages under the DTPA?
before 1995 you were allowed to now you only get economic damages through DTPA, unless you use a tie in statute, in which case you can get actual damages
49
Recovery available under a tie in statute brought through DTPA?
actual damages, and up to 3x if knowingly
50
what does the FDCPA stand for?
Fair Debt Collection Practices Act
51
What is the FDCPA?
federal law that regulates debt collection
52
Who does the FDCPA apply to (and define)
FDCPA only applies to the conduct of a debt collector. Debt collector: person who uses any interstate commerce/mails in business (principle purpose) to collect debts/regularly collects/attempts to collect
53
What sort of debts does the FDCPA apply to?
consumer debts only: personal, family, household purposes
54
Exception to rule that FDCPA only applies to third party debt collection company
when you are collecting on your own debt but under a different name so it looks like you're a third party
55
can an attorney be subject to the FDCPA?
yes if they regularly collect debts for people
56
List Communications Prohibited by FDCPA | 5 bad things, 1 good thing
1. Time and Place (before 8, after 9) 2. If represented by attorney 3. place of employment 4. communication by third parties (except to try to locate consumer) 5. disputed debts: if disputed stop all collection until verified one communication that's good 1. verify debt: to insure consumer not misled/deceived must provide consumer with notice about amount of debt/existence
57
Conduct Prohibited by the FDCPA
debt collectors can't 1. harass/abuse 2. make false, misleading, deceptive reps or be unfair 3. do unfair/uncons practices (very broadly interpreted)
58
how is the FDCPA enforced?
private cause of action (1 yr SoL) or administratively
59
Damages under FDCPA
Individual: - -debt collector who fails to comply liable for actual damages sustained by each person - -court can award additional damages not to exceed 1K ``` class action: --actual damages for all class members not to exceed 500K or 1% net worth of D ```
60
Attorney's Fees under FDCPA
consumer: same as DTPA defendant: must show bad faith/harassment
61
Texas State Debt Collection Law
It was just a tort but now it has been mostly replaced by the enactment of the Texas Debt Collection Act (TDCA)
62
Similarities between TDCA and FDCPA
both apply to consumer debt and both apply to a debt collector but TDCA says anyone can be a debt collector
63
Prohibited Conduct under TDCA | 4 bad things
(list is exclusive, not broad like FDCPA) 1. threats or coercion - threats of arrest, take illegal action, take wages 2. harassment and abuse - profanity, annoying phone calls 3. unfair/uncons. acts 4. fraud, deceptive, misleading representations - misleading names, what can happen, saying debt collector is attorney
64
Enforcement of TDCA (crim and civ)
Crim: charged with misdemeanor, fine no less than 100, no more than 500 for each violation Civ: actual damages injunctive relief
65
Attorney Fees under TDCA
Consumer: same as DTPA Defendant: bad faith/harassment
66
TDCA as a Tie In
violation of the TDCA is actionable under the DTPA as a tie in
67
3 causes of action when using a tie in stat
1. pure tie in statute 2. pure DTPA 3. DTPA as tie in
68
List of Most Common Tie In Statutes (14)
1. Business Opportunity Act -sell buyer goods to start business 2. Contest/Giveaway Act -about sales promotions 3. Debt Collection Acts 4. Health Spa Act 5. Home Solicitation Act (door to door) 6. credit service org (credit repair orgs) 7. Removal of unauthorized cars from parking facility (towing, signage req) 8. rental/purchase agreement 9. representation as attorney (public notary) 10. manufactured housing standards act 11. motor vehicle commission code (lemon laws/new cars) 12. timeshare act (6 days to rescind) 13 unfair claims settlement practices act 14. regulation of telephone solicitation
69
Chapter 541 of the Insurance Code (Misrep and Discrim)
protects against unfair/deceptive acts or practices in the business of insurance
70
Who does Chapter 541 (Insurance) apply to?
any person/entity not limited to consumer like the DTPA
71
Things Prohibited in Chapter 541 (insurance) | 6
1. Misrep/False Ad of policy contracts 2. Defamation (of competitor co.) 3. Unfair discrimination (of ppl with same risk) 4. deceptive name/word/symbol/slogan (or using competitors) 5. Unfair settlement practices (failing to attempt good faith, prompt, equitable settlement when liability clear) 6. misrep of existing policy
72
Relief Available under 541 (insurance)
claim filed by any person who sustained actual damage by person who violated Ch. 541 actual damages
73
How DTPA and Chapter 541 Go Together | 4 causes of action
1. consumer can file claim under DTPA based on violation of 541 2. claim of action under insurance code 3. violation of laundry list 4. ?
74
Recovery under Chapter 541 (Insurance)
actual damages + court costs and reasonable/necessary attorney fees if knowingly 3x actual damages
75
Attorney Fees under Chapter 541 (Insurance)
Consumer: just like DTPA D: if P's actions groundless, bad faith, harassment get court fees/attorney
76
When to Bring a Suit under Chapter 541 (Insurance)
all actions under 541 must be commenced 2 years after date unfair method of competition/deceptive act occurred or w/in 2 years after person brining action discovered/should have discovered
77
Notice Required for Chapter 541 and Failure to Give Notice
as prereq to filing consumer must give D at least 60 days written notice if consumer doesn't: abatement to give notice
78
Settlement Offer Under Chapter 541 (Insurance) | when and what it must contain
D should offer to settle any time during period beginning on date notice of suit is received and ending on 60th day after receipt should include amount of money/consideration (cash value) of settlement for damages and amount to compensate attorney fees
79
Effect of Not Settling a Chapter 541 Insurance Claim
rejection of reasonable settlement will limit recovery if same/substantially or more than damages found by trier, consumer gets less of: -settlement or money at trial also limits amount of attorney fees
80
Mediation under DTPA or Chapter 541 (Insurance)
either side can compel mediation by motion filed 90 days after service of pleading seeking realief under 541 or DTPA both sides share cost, unless amount of damages under 15K (then party asking for mediation pays) mediation held w/in 30 days after request
81
Unfair Claim Settlement Practices Act, a DTPA Tie In
designed to help guarantee no insurer in Texas engages in unfair settlement of claims No: 1. not settling with insured when you should violation: insurer who wrongfully requires tax returns commits deceptive practice under DTPA
82
Chapter 542 (Insurance) Prompt Payment of Claims. when does an insurer have to respond to a claim?
Insurer must respond to claim no later than 15th day after receipt of notice OR 30th business day if insurer is eligible surplus lines insurer
83
Chapter 542 (Insurance). When must insurer accept or reject claims?
must accept or reject claims w/in 15 days (gen)
84
Chapter 542 (insurance): what if you are unable to accept or reject w/in 15 days?
well then you can have 45
85
Chapter 542: what happens if you fail to meet the time limits?
subject to a penalty, liquidated damages: in addition to claim, pay 18% per annum of amount of claim as damages and liable for attorney fees
86
Chapter 542: when does insurer have to pay claims?
w/in 5 days failure = penalty
87
When Does the insurer breach the common law duty of good faith?
owes duty of good faith and fair dealing to insured in handling claim breaches when it fails to attempt in good faith to effectuate a prompt fair, equitable settlement when liability is clear (not a bona fide dispute) common law = tort for damages same as chapter 541 stat. good faith req
88
Third Party Claims (Stowers Doctrine)
situation where it better for insured to settle b/c they can stay under policy limits but better for insurer to litigate b/c they at at limit of liability rule: if claimant offers to settle in the policy limits when liability is reasonably clear than the insurer has a duty to settle
89
What happens if insurance company doesn't settle when they should (goes against the stower's doctrine)
insurance company liable for additional damages and it violates duty of good faith (so opens door for contractual/stat damages) P will get all amounts rendered against insured from co., including post judgment interest
Consumer Law
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