Compaq Computer Corp. v. Lapray

• Decision Date: 20 June 2002
• Docket Number: No. 09-01-368-CV.,09-01-368-CV.
• Citation: 79 S.W.3d 779
• Parties: COMPAQ COMPUTER CORPORATION, Appellant, v. Hal LAPRAY, Tracy D. Wilson, Jr., Alisha Seale Owens, Appellees.
• Court: Texas Court of Appeals

79 S.W.3d 779

COMPAQ COMPUTER CORPORATION, Appellant, v. Hal LAPRAY, Tracy D. Wilson, Jr., Alisha Seale Owens, Appellees.

No. 09-01-368-CV.

Court of Appeals of Texas, Beaumont.

Submitted March 7, 2002.

Decided June 20, 2002.

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Sheila L. Birnbaum, Skadden, Arps, Slate, Meagher & Flom LLP, New York, NY, Robert Q. Keith, Keith, Weber & Mosty, PLLC, Johnson City, David J. Beck, Alistair B. Dawson, Beck, Redden & Secrest, Houston, Carl Parker, Parker & Parks, LLP, Port Arthur, for appellant.

Wayne A. Reaud, The Reaud Law Firm, L. DeWayne Layfield, Law Office of L. DeWayne Layfield, Hubert Oxford, III, Robert Craft, Benckenstein & Oxford, LLP, Gilbert I. Low, Gary Neale Reger, Jack P. Carroll, Orgain, Bell & Tucker, LLP, Beaumont, Charles Silver, Austin, C. Keith Kebodeaux, Law Office of Keith Kebodeaux, Beaumont, for appellees.

Before WALKER, C.J., BURGESS and HILL^*, JJ.

OPINION

DON BURGESS, Justice.

Hal LaPray, Tracy D. Wilson, Jr., and Alisha Seale Owens (plaintiffs/appellees) filed suit on behalf of themselves and all others similarly situated against Compaq Computer Corporation. The suit alleges computers sold or manufactured by Compaq incorporate a defective floppy disk controller (FDC). The suit expressly "does not seek claims for consequential damage as the result of the actual loss or corruption of data." Plaintiffs only causes of action are (1) declaratory judgment; (2) breach of contract; and (3) breach of express warranty.

In their petition, plaintiffs sought, and were granted, certification of a class defined as themselves and all private¹ purchasers of certain Compaq computers.² In its order, the trial court made findings of fact and conclusions of law and incorporated a trial plan. The trial court found class certification proper under both TEX.R. CIV. P. 42(b)(2) and 42(b)(4). The trial court declared:

First and predominately, under TRCP 42(b)(2) the Court certifies the counts for declaratory relief which, if granted, would lead to enforcement of the remedies permitted by the written warranty (of repair, replacement or refund.)

The Court also separately certifies under TRCP 42(b)(2) the counts for declaratory relief and breach of warranty that Compaq argues could become a predicate for monetary damages outside the four corners of the written warranty (money damages for, alternatively, breach by sale and breach by failure to repair).

The trial court then found it was also appropriate to certify a class for damages under Rule 42(b)(4). Compaq appeals raising ten issues.³

In its first two issues, Compaq contends the trial court abused its discretion in certifying the mandatory class for declaratory relief pursuant to TEX.R. CIV. P. 42(b)(2). Compaq first argues the trial court's order ignored established Texas law in certifying a mandatory class for declaratory relief. This argument has two grounds: 1) Plaintiffs' claims for damages preclude their request for declaratory relief; and 2) the certification order results in an impermissible advisory opinion that would give rise to piecemeal litigation. Next, Compaq argues the trial court erroneously held that a damages class can be certified under TEX.R. CIV. P. 42(b)(2).

In support of its first ground, Compaq cites Koch Oil Co. v. Wilber, 895 S.W.2d 854 (Tex.App.-Beaumont 1995, writ denied), Tucker v. Graham, 878 S.W.2d 681 (Tex.App.-Eastland 1994, no writ), Boatman v. Liles, 970 S.W.2d 41 (Tex.App.-Tyler 1998, no pet.), and Universal Printing Co. v. Premier Victorian Homes, Inc., 73 S.W.3d 283, 2001 WL 170964 (Tex.App.-Houston [1st Dist.] February 22, 2001, no pet.). Compaq relies on Koch, for its assertion that Texas law prohibits bringing a declaratory judgment action "to settle issues and rights of parties in a pending suit." Koch Oil, 895 S.W.2d at 866. In Koch, this court noted that it was in appellees' eighth amended original petition wherein they sought declaratory judgment on issues that were central to appellees' case-in-chief; therefore, seeking declaratory relief was improper. Id. at 866. In Koch "[p]laintiffs' original suit fully covered these issues and request for declaratory judgment presented no new controversies." Id.

Similarly in Tucker, 878 S.W.2d at 682, the court found plaintiffs' original petition sought monetary damages for damage caused by Tucker's dam, the removal of the dam, and attorney's fees. Plaintiffs' alleged a cause of action for violation of Section 11.086 of the Water Code based on the nuisance (the dam) constructed by Tucker. Id. at 683. The court noted, "[t]his was a mature cause of action that could be enforced. Plaintiffs' declaratory judgment action involved the same parties and the same issue as in the statutory cause of action and was not appropriate." Id.

In Boatman, plaintiffs' original petition alleged the Boatmans negligently diverted the natural flow of water from their land. Boatman, 970 S.W.2d at 42. The court rejected both of plaintiffs' bases for declaratory relief. Id. at 43. First, plaintiffs claimed there was a need for the court to determine the rights of the parties under the property deeds. The court noted the ownership of the property was never at issue. Id. Second, plaintiffs asserted there was a need for the court to determine the parties' rights under section 11.086 of the Texas Water Code. Id. The court observed the "declaratory judgment action requested no greater or different relief than the claim for damages resulting from negligence and the violation of [section] 11.086." Id.

In Universal Printing, a homebuilder sued neighboring homeowners to prevent them from blocking an alley. Universal Printing, 73 S.W.3d 283, 286-87. In that case, the court upheld the declaratory judgment. Id., at 295-98. While the live pleadings for the homeowners no longer asserted ownership, some of the homeowners had filed affidavits of adverse possession in the public records and those affidavits had not been revoked. Id. at 296-97. Also, some homeowners continued to testify at trial that they owned the alley. Id. The court found declaratory relief was appropriate due to the affidavits in the deed records and the continued insistence of ownership. Id. at 297-98.

None of these cases found declaratory relief improper on the basis intimated by Compaq — because plaintiffs sought damages. Rather, in Koch and Tucker it was because the declaratory judgment was sought on issues which had previously been presented in the suit. Here, plaintiffs sought declaratory relief in their original petition. In Boatman, the court noted:

The Declaratory Judgments Act provides that a person interested under a deed or other writing constituting a contract may have the court determine any question of construction or validity arising under the instrument and obtain a declaration of rights, status, or other legal relations under it. In addition, a person whose rights, status, or other legal relations are affected by a statute may have the court determine any question of construction or validity arising under the statute and obtain a declaration thereunder. The Act provides a procedural method for deciding the validity or proper construction of a written instrument or a statute. A declaratory judgment should not be rendered when there is no claim that a statute or a deed is ambiguous or invalid.

970 S.W.2d at 42-43 (footnotes omitted). The court then found the plaintiffs were seeking no such determination or decision. Id. at 43. In the present case, plaintiffs seek a construction of the warranty at issue and a declaration of their rights under that warranty. In Universal Printing, 73 S.W.3d at 297-98, the declaratory relief was not only upheld, but plaintiffs were awarded $10,000 for actual damages. We are unpersuaded by these cases that plaintiffs' claims for damages necessarily preclude their request for declaratory relief.

Next, Compaq claims the trial court's certification order "contravenes Texas' prohibition on rendering advisory opinions and piecemeal litigation." The cases cited by Compaq in support of this claim are inapposite to the case at bar.

In Space Master International, Inc. v. Porta-Kamp Manufacturing. Co., 794 S.W.2d 944, 948 (Tex.App.-Houston [1st Dist.] 1990, no writ), the court affirmed the trial court's dismissal of Space Master's suit for declaratory judgment. Space Master conceded the suit for declaratory judgment involved the same parties and issues as proceedings then pending in a New Jersey state court and a Massachusetts federal court. Id. The court's pronouncement against "piecemeal" litigation was made in the context of multiple litigations, not a bifurcated class action. Id. at 947.

Likewise, in Southwest Airlines Co. v. Texas High-Speed Rail Authority, 863 S.W.2d 123 (Tex.App.-Austin 1993, writ denied), the court affirmed the trial court's dismissal of Southwest's suit for declaratory and injunctive relief for want of jurisdiction. Southwest's first suit had failed for lack of subject-matter jurisdiction. Id. at 125-26. The court found "Southwest was merely attempting to obtain a different judgment, in the same controversy, by way of declaratory and injunctive relief. This is precisely the kind of piecemeal litigation in which declaratory relief is not available...." Id. at 126.

Similarly, in Marlow v. American Suzuki Motor Corp., 222 Ill.App.3d 722, 165 Ill.Dec. 166, 584 N.E.2d 345, 350 (1991), the "impermissible piecemeal litigation" entailed more than one action, not a single class action to be tried in multiple stages.

Compaq cites Paulsen v. Texas Equal Access to Justice Foundation, 23 S.W.3d 42, 45 (Tex.App.-Austin 1999, writ dism'd) and California Products, Inc. v. Puretex Lemon Juice, Inc., 160 Tex. 586, 334 S.W.2d 780, 782 (1960), for the general ban on advisory opinions. In both those cases, the court held there was no justiciable controversy. Compaq does not contend there is no justiciable...