Gunn Infiniti v. O'Byrne
| Decision Date | 26 August 1999 |
| Citation | 996 S.W.2d 854 |
| Parties | (Tex. 1999) GUNN INFINITI, INC., PETITIONER v. DONALD O'BYRNE, RESPONDENT NO. 98-0333 |
| Court | Texas Supreme Court |
IN THE SUPREME COURT OF TEXAS ON PETITION FOR REVIEW FROM THE COURT OF APPEALS FOR THE FOURTH DISTRICT OF TEXAS
We are called upon to decide whether various offers made to a consumer before he sent a DTPA notice letter and filed suit entitled the seller to a jury instruction or question on mitigation of damages. We conclude that in a DTPA case, a defendant's offer that attempts to ameliorate an injury caused by its conduct may raise a fact question on an affirmative defense of mitigation if the offer did not require the plaintiff to release its claims. Because the offers in this case were offers of settlement that implicitly required the plaintiff to relinquish his claims, the seller was not entitled to a jury question on mitigation. However, we agree with the seller that there is no evidence to support the award of mental anguish damages. Accordingly, we reverse the judgment of the court of appeals and remand this case to that court for further proceedings consistent with this opinion.
Donald O'Byrne, a resident of Shreveport, Louisiana, was in the market for a black-with-tan-interior five-speed manual transmission 1993 Infiniti G-20. After he failed to find this particular car in Louisiana, O'Byrne called several Infiniti dealerships in Texas. As a part of his Texas search, he contacted Gunn Infiniti, Inc. in San Antonio. A sales representative at Gunn searched the dealership's inventory and found a car that fit O'Byrne's desires in the body shop where it was being repainted. The Gunn employee told O'Byrne that the dealership had the car he sought. O'Byrne asked the sales representative if the car had ever been damaged, and she told him, falsely, that it had not and that it was brand new. O'Byrne booked a one-way flight to San Antonio to purchase the car. At the dealership O'Byrne again asked if the car had been damaged, and the sales representative again told him that it had not, knowing that it had suffered some slight damage. The sales representative also told O'Byrne that the car had an air bag, and a sticker under the hood of the car indicated that the car was equipped with an air bag. But it was not. The original hood of the car had been replaced with the hood of a later model that did have an air bag.
One week after purchasing the car, O'Byrne noticed that the paint on the front of the car was oversprayed and rough. He also suspected that the hood had been removed because the bolts and hinges had been reworked and painted. O'Byrne immediately called Gunn Infiniti. After initial denials, the sales representative eventually admitted that the car had been damaged, repaired, and repainted.
Gunn Infiniti then attempted to find an exact replacement but was unable to locate one because the model year for that car had ended. Gunn Infiniti thereafter made a number of offers to O'Byrne. It offered to refund the purchase price along with any transportation costs O'Byrne had incurred. O'Byrne rejected that offer. Then, Gunn Infiniti offered to replace the damaged car with another one that was the same model but a different color and to pay $1,000. O'Byrne rejected that offer because he wanted a black Infiniti. Next, Gunn Infiniti offered to replace O'Byrne's car with a 1993-and-a-half year model and charge him the dealer invoice price for the additional equipment that was standard on the newer model. Apparently, the 1993 Infiniti G-20 did not come with an air bag or a sun roof, but these additions, among others, were standard on the 1993-and-a-half model. O'Byrne rejected that offer because he did not want to pay for the additional equipment. Finally, Gunn Infiniti offered to have the vehicle shipped to San Antonio and to repaint it for free. O'Byrne wanted Gunn Infiniti to pay for having the car repainted in Shreveport and submitted an estimate. Gunn Infiniti refused that proposal because it thought the estimate was too high. Several months later, O'Byrne attempted to accept the previous offer of a full refund plus expenses, but Gunn Infiniti said that the offer was no longer available because O'Byrne had put several thousand miles on the car.
O'Byrne sued Gunn Infiniti, alleging fraud and violations of the Texas Deceptive Trade Practices-Consumer Protection Act (DTPA). At trial, Gunn Infiniti tendered a jury question on the issue of mitigation of damages, but the trial court refused to include the question in the jury charge. The jury returned a verdict for O'Byrne, finding that Gunn Infiniti had violated the DTPA, had engaged in knowing conduct under the DTPA, and had committed fraud. The jury awarded O'Byrne $10,500 in benefit-of-the-bargain damages, $11,000 in mental anguish damages, $50,000 in exemplary or additional DTPA damages, and attorney's fees. The trial court rendered judgment for O'Byrne based on the DTPA findings, adding $2,000 to the actual damages as the DTPA required at the time, for a total of $73,500 in actual and additional damages. Gunn Infiniti appealed on the grounds that, among other things, the trial court failed to submit a question on the issue of mitigation of damages and that there was legally insufficient evidence to support an award of mental anguish damages. The court of appeals affirmed. 963 S.W.2d 787.
We first consider Gunn Infiniti's argument that it is entitled to a new trial because of the trial court's failure to submit the issue of mitigation to the jury.
As an initial matter, O'Byrne contends that the settlement-offer provisions of the DTPA foreclose the application of common-law mitigation principles. We disagree. Nothing in the DTPA evidences a legislative intent to withdraw mitigation of damages as an affirmative defense, even when a defendant alleges that the consumer failed to mitigate by failing to accept the defendant's offer to mitigate. Nor does the concept of mitigation inherently conflict with the DTPA.
The DTPA causes of action in this case are governed by the Act as it existed before the 1995 amendments. Former section 17.505 contained procedures under which a defendant could potentially limit the damages recovered by a plaintiff who rejected a settlement offer.1 Those procedures were largely reenacted in what is now section 17.5052 of the DTPA. See TEX. BUS. & COM. CODE 17.5052. However, because there are some differences in the language used in the current statute and that used in its predecessor, we will refer only to former section 17.505.
The settlement-offer mechanism of former section 17.505 and the common-law doctrine of mitigation have some principles in common, but they nevertheless embody distinct concepts. The DTPA settlement-offer provisions of former section 17.505 were designed to limit the total amount of damages that a consumer could recover. They were not designed to mitigate damages that a consumer might otherwise suffer. See former TEX. BUS. & COM. CODE 17.505(d). A seller who committed a deceptive act or engaged in deceptive trade practices could attempt to avoid the punitive provisions of the DTPA, even after demand was made or suit was filed, by making a settlement offer that would compensate the consumer for actual damages. See id. Under former section 17.505, the consumer's actual damages are to be determined by the trier of fact without reference to the settlement offer. See id.
Under mitigation principles, the long-standing law of this state requires a claimant to mitigate damages if it can do so with "'trifling expense or with reasonable exertions.'" Great Am. Ins. Co. v. North Austin Mun. Util. Dist. No. 1, 908 S.W.2d 415, 426 (Tex. 1995) (quoting Walker v. Salt Flat Water Co., 96 S.W.2d 231, 232 (Tex. 1936)). The duty to mitigate often is not dependent on an offer from the wrongdoer. And a consumer may have the opportunity to mitigate his or her damages immediately after the deceptive act or practice occurred, well before any DTPA notice letter is sent or suit is filed. Nothing in the DTPA suggests that the Legislature intended to abrogate this aspect of the common law. Nor does the DTPA suggest that a defendant should be discouraged from offering to mitigate damages before a consumer sends a DTPA notice letter or files suit. A defendant may see the error of its ways promptly after the deceptive or unconscionable act occurred and seek to forestall all or at least some of the damages suffered by a consumer. Requiring a plaintiff to mitigate when a reasonably prudent person would do so is not at odds with the settlement mechanism contained in the DTPA.
Other differences between a DTPA settlement offer and the common-law duty to mitigate are the applicable time periods and whether a jury as opposed to a court determines the effect of a defendant's offer. But, here again, these difference do not result in a conflict or even tension between the DTPA and the common-law duty to mitigate. Under former section 17.505, a defendant such as Gunn Infiniti could make a settlement offer to a plaintiff only within defined periods after the plaintiff sent written notice or filed suit. See former TEX. BUS. & COM. CODE 17.505(c). If the plaintiff rejected the settlement offer, the defendant could file it with the trial court along with an affidavit confirming the rejection. See id. 17.505(d). After trial, if the court found that the amount offered was the same as or substantially the same as the actual damages found by the trier of fact, then the plaintiff's recovery was limited to the lesser of the settlement offer or the actual damages found at trial. See id. The settlement offer was not admissible as evidence in a jury trial. See id.
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