Decision Control Systems, Inc. v. Personnel Cost Control, Inc., 05-89-00395-CV

• Decision Date: 21 February 1990
• Docket Number: No. 05-89-00395-CV,05-89-00395-CV
• Citation: 787 S.W.2d 98
• Court: Texas Court of Appeals
• Parties: DECISION CONTROL SYSTEMS, INC., Appellant, v. PERSONNEL COST CONTROL, INC., Thomas J. Humphreys, and Don R. Thomas, Appellees.

Page 98

787 S.W.2d 98

DECISION CONTROL SYSTEMS, INC., Appellant, v. PERSONNEL COST CONTROL, INC., Thomas J. Humphreys, and Don R. Thomas, Appellees.

No. 05-89-00395-CV.

Court of Appeals of Texas Dallas.

Feb. 21, 1990.

Martin T. Bode, Arlington, for appellant.

Bruce E. Longenecker, Dallas, for appellees.

Before HOWELL, ROWE and KINKEADE, JJ.

OPINION

HOWELL, Justice.

This suit grows out of the sale of assets between two corporations. Appellant, Decision Control Systems, Inc. (Buyer), appeals a take-nothing judgment on its Deceptive Trade Practices Act claim against Personnel Cost Control, Inc. (Seller), and the principals of Seller, Thomas J. Humphreys and Don R. Thomas. Buyer argues that the trial court erred in submitting Buyer's DTPA claim against Seller to arbitration and in entering judgment on the award. Additionally, Buyer contends that the trial court erred in entering a take-nothing judgment against Humphreys and Thomas. The issue is whether the arbitration clause in the Asset Purchase Agreement (Agreement) covers Buyer's DTPA claim against Seller. Finding that the arbitration clause is not broad enough nor specific enough to cover DTPA claims, we reverse the judgment of the trial court and remand for further proceedings on Buyer's DTPA claims against Seller and its principals.

Initially, Seller filed suit for an order compelling arbitration pursuant to the Agreement. ¹ Thereafter, Buyer filed a separate action against Seller, Humphreys, and Thomas for damages under the DTPA. The court below ordered consolidation, ordered that Seller's DTPA claim be submitted to arbitration, and ordered that Buyer's DTPA claims against Humphreys and Thomas be stayed. After Seller prevailed at the arbitration hearing, the trial court entered a money judgment for Seller against Buyer on the contractual claim and entered a take-nothing judgment against Buyer on its DTPA claims against Seller, Humphreys, and Thomas.

The arbitration clause provides: "[A]ll questions as to rights and obligations arising under the terms of this Agreement are subject to arbitration except for matters involving claims for injunctive relief...." (Emphasis added.) In its first point of error, Buyer contends that its DTPA cause of action against Seller does not arise under the Agreement, but rather is composed of statutory claims that are separate from the Agreement. Buyer cites Weitzel v. Barnes, 691 S.W.2d 598 (Tex.1985), for the proposition that DTPA misrepresentation claims are separate and distinct from the contract itself. While not directly on point, the Supreme Court did there hold that oral misrepresentations made before (and after) an "as is" purchase agreement could serve as the basis of a DTPA claim and that, in that particular case at least, traditional contract notions did not apply. Id. at 600. Buyer's essential position is that the arbitration clause covered only claims arising under the terms of the contract, not causes of action under the DTPA. Furthermore, Buyer contends that the order to arbitrate violates the nonwaiver provision of the DTPA. See TEX.BUS. & COM.CODE ANN. § 17.42 (Vernon 1987); Poe v. Hutchins, 737 S.W.2d 574, 580 (Tex.App.--Dallas 1987, writ ref'd n.r.e.) (section 17.42 prohibits waiver of a buyer's DTPA claim based on his conduct, as well as contractual waivers). We do not reach the question whether a consumer can ever contractually agree, in advance of the occurrence of a dispute, that his DTPA claim shall be arbitrated; we hold that this arbitration clause was neither broad enough nor specific enough to cover DTPA claims.

The Deceptive Trade Practices Act is to be liberally construed and applied to promote its underlying purposes. TEX.BUS. & COM.CODE ANN. § 17.44 (Vernon 1987). We therefore hold that any ambiguity in a contract clause seeking to limit right of recourse under the DTPA must be construed against such limits. We interpret the language of the contract, "all questions as to rights and obligations arising under the terms of the agreement," to mean only actions for breach of the provisions of the written agreement.

Buyer asserts that its claims, which are essentially misrepresentation claims, do not arise under the written agreement but under the DTPA. Seller argues that misrepresentation claims fall under the Agreement because of the following clause:

Disclosure. Seller has disclosed to Purchaser all facts material to the Purchased Assets. No representation or warranty by the Seller in this Agreement or in any writing attached hereto, contains or will contain any untrue statement of material fact or omits or will omit to state any material fact (of which the Seller or any of its directors or stockholders has knowledge or notice) required to make the statements herein or therein contained not misleading.

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