Hedley Feedlot, Inc. v. Weatherly Trust

• Decision Date: 17 May 1993
• Docket Number: No. 07-92-0246-CV,07-92-0246-CV
• Parties: HEDLEY FEEDLOT, INC., Appellant, v. WEATHERLY TRUST, Appellee.
• Court: Texas Court of Appeals

Page 826

855 S.W.2d 826

HEDLEY FEEDLOT, INC., Appellant, v. WEATHERLY TRUST, Appellee.

No. 07-92-0246-CV.

Court of Appeals of Texas,

Amarillo.

May 17, 1993.

Rehearing Overruled July 12, 1993.

Gene E. Steed, Perryton, for appellant.

Bradley M. Pettiet, Jones, Flygare, Galey, Brown & Wharton, Lubbock, for appellee.

Before REYNOLDS, C.J., and BOYD and POFF, JJ.

ON MOTION FOR REHEARING

BOYD, Justice.

The motion for rehearing of appellee Weatherly Trust is granted. Accordingly, our opinion dated March 24, 1993, is withdrawn, our judgment set aside, and the following opinion substituted.

Appellant Hedley Feedlot, Inc., (Feedlot) brings this appeal from a judgment in favor of appellee Weatherly Trust (Trust) for losses sustained in a cattle feeding venture. In its suit, the Trust attributed its losses to misrepresentations by the Feedlot about the cattle purchase. For reasons hereinafter expressed, we affirm the judgment of the trial court.

The suit originated in February of 1988 when the Trust, ¹ acting through Bill Weatherly, (Weatherly) purchased cattle, feed, medicine, and feeding services from the Feedlot. The Trust lost $17,439.16 on its investment, as well as its expected profits. The Trust alleged that the Feedlot violated § 17.46(b)(5) of the Deceptive Trade Practices Act (DTPA) by misrepresenting the characteristics of the goods and services purchased by the Trust, and violated § 17.46(b)(7) of the DTPA by misrepresenting the quality of the goods and services sold to the Trust.

The Trust contended that it relied upon the false, misleading, and deceptive representations of the manager of the Feedlot, ² Sammy Slover, in making its decision to purchase the cattle and services provided by the Feedlot. Slover made various representations to Weatherly regarding the type of cattle, weight, projected cost of feeding, the length of time on feed, and the projected gain of the cattle. The Trust further alleged that these representations were a producing and proximate cause of the losses it suffered.

In three of its nineteen points, ³ the Feedlot attacks the finding that the Trust is a "consumer" as that term is defined by § 17.45(4) of the DTPA. We will address these points topically rather than seriatim.

In order to support a judgment based on a violation of the DTPA, the complainant must be a consumer of goods. Lochabay v. Southwestern Bell Media, 828 S.W.2d 167, 170 (Tex.App.--Austin 1992, n.w.h.). Whether a complainant is a consumer under the DTPA is a question of law to be determined by the court. Johnson v. Walker, 824 S.W.2d 184, 187 (Tex.App.--Fort Worth 1991, n.w.h.).

The DTPA defines consumer as:

an individual, partnership, corporation, this state, or a subdivision or agency of this state who seeks or acquires by purchase or lease, any goods or services, except that the term does not include a business consumer that has assets of $25 million or more, or that is owned or controlled by a corporation or entity with assets of $25 million or more.

Tex.Bus. & Com.Code Ann. § 17.45(4) (Vernon 1987).

A complainant must establish at least two requirements to qualify as a consumer under the DTPA. First, the complainant must have sought or acquired goods or services by purchase or lease; and second, the goods or services purchased or leased must form the basis of the complaint. Melody Home Mfg. Co. v. Barnes, 741 S.W.2d 349, 351-52 (Tex.1987); Cameron v. Terrell & Garrett, Inc., 618 S.W.2d 535, 539 (Tex.1981); Herndon v. First Nat. Bank of Tulia, 802 S.W.2d 396, 399 (Tex.App.--Amarillo 1991, writ denied).

"Goods" are defined as "tangible chattels ⁴ or real property purchased or leased for use." Tex.Bus. & Com.Code Ann. § 17.45(1) (Vernon 1987). The section defines "services" as "work, labor, or service purchased or leased for use, including services furnished in connection with the sale or repair of goods." Id. at § 17.45(2). Standing as a consumer must be established in terms of the complainant's relationship to the transaction, not by the contractual relationship with the defendant. Birchfield v. Texarkana Memorial Hosp., 747 S.W.2d 361, 368 (Tex.1987); Flenniken v. Longview Bank and Trust Co., 661 S.W.2d 705, 707 (Tex.1983).

The Trust satisfied these two requirements. The Trust purchased the cattle and feeding services from the Feedlot. Second, the Trust primarily complained of the low profitability of the cattle at the time of sale, and attributed its losses to the actions of the Feedlot.

Trusts have been held to be consumers within the meaning of the DTPA. For example, in Citizens State Bank of Dickinson v. Bowles, 663 S.W.2d 845, 847 (Tex.App.--Houston [14th Dist.] 1983, writ dism'd), the appellee-trustee, on behalf of the trust, won a suit against the independent executor of an estate for breach of contract, fraud, and violations of the DTPA. After setting out the definition of a consumer, the court found that the appellee-trustee was a consumer. Id. at 849. ⁵

The Feedlot also argues that the cattle were not acquired "for use" as a consumer, but rather were an investment, i.e., for resale, in the commercial cattle feeding market. We do not agree. Even though the goods are purchased for resale, this does not preclude a complainant from maintaining an action under the DTPA. Otto, Inc. v. Cotton Salvage & Sales, Inc., 609 S.W.2d 590, 595 (Tex.Civ.App.--Corpus Christi 1980, writ dism'd).

In a factually analogous case, Gable v. Wood, 622 S.W.2d 884, 886 (Tex.App.--Fort Worth 1981, writ dism'd), the court addressed the issue of cattle feeders in the context of DTPA violations. The defendants argued that the plaintiffs, who placed cattle at defendant's feedlot, were not consumers because the cattle were purchased by plaintiff for resale. Id. at 886. In holding that the plaintiffs were consumers within the meaning of the DTPA, the court stated that the fact that the cattle are kept by plaintiffs for resale is irrelevant to the determination of consumer status. Id. The court pointed out that the feedlot furnished feedstuffs, medicines, and other services used or consumed by the cattle, which the plaintiff did not resell. Id.; see also Hennessey v. Skinner, 698 S.W.2d 382, 385 (Tex.App.--Houston [14th Dist.] 1985, no writ) (court held that "the purchase of cattle for commercial cattle raising purposes generally is a purchase of goods 'for use' covered by the DTPA").

We conclude that the Trust is a consumer for purposes of the DTPA. Accordingly, we overrule points of error one, six and seven.

In appellant's second point of error it argues that the trial court erred in denying its special exception to the petition which complained of the failure to join necessary and indispensable parties, to-wit, the beneficiaries of the Trust.

Joinder of parties is controlled by Rule 39 of the Texas Rules of Civil Procedure, which requires a person to be joined in only two circumstances. First, a person must be joined if complete relief cannot be afforded in his absence. Tex.R.Civ.P. 39(a)(1). Second, a person must be joined if he claims an interest in the litigation and disposition in his absence will (i) impede his ability to protect his interest, or (ii) create a risk that the parties will be subject to inconsistent obligations. Id. at (a)(2).

The compulsory joinder rule focuses not so much on whether the court has jurisdiction over the parties, but rather on whether the court ought to proceed with the parties before it. Cooper v. Texas Gulf Industries, Inc., 513 S.W.2d 200, 204 (Tex.1974); Texas Oil & Gas Corp. v. Ostrom, 638 S.W.2d 231, 233 (Tex.App.--Tyler 1982, writ ref'd n.r.e.). One of the policies behind the rule is to lessen the numbers of categories of indispensable parties. 1 Roy W. McDonald, Texas Civil Practice § 5.37 (1992). The Texas Supreme Court has stated, "it would be rare indeed if there were a person whose presence was so indispensable in the sense that his absence deprives the court of jurisdiction to adjudicate between the parties already joined." Cooper v. Texas Gulf Industries, Inc., 513 S.W.2d at 204.

Generally, the trial court has broad discretion under the rules of civil procedure in questions regarding the joinder of parties, and its determination will not be disturbed on appeal except for abuse of discretion. Lawyers Civil Process v. State ex rel. Vines, 690 S.W.2d 939, 944 (Tex.App.--Dallas 1985, no writ); Williamson v. Tucker, 615 S.W.2d 881, 886-87 (Tex.Civ.App.--Dallas 1981, writ ref'd n.r.e.). Even under the rule regarding joinder of persons needed for just adjudication, there is "no arbitrary standard or precise formula for determining whether a particular person falls within its provisions." Cooper v. Texas Gulf Industries, Inc., 513 S.W.2d at 204; Lawyers Civil Process v. State ex rel. Vines, 690 S.W.2d at 944. Cases involving joinder disputes must turn on an application of the particular facts involved. Lawyers Civil Process v. State ex rel. Vines, 690 S.W.2d at 944; Williamson v. Tucker, 615 S.W.2d at 887.

The general rule is that in suits involving trust property, both the trustee and the beneficiaries should be made parties. Slay v. Burnett Trust, 143 Tex. 621, 187 S.W.2d 377, 382 (1945); Citizens State Bank of Dickinson v. Bowles, 663 S.W.2d at 848. However, this rule does not apply where the terms of the trust dictate the power to litigate expressly upon the trustee. Citizens State Bank of Dickinson v. Bowles, 663 S.W.2d at 848. In actions adverse to a trust, if the dispute involves no conflict between the trustee and the beneficiaries, or between the beneficiaries themselves, a trustee may sue or defend in the trustee's own name when, either by express grant or necessary implication, that power is vested in the trustee. McDonald v. Alvis, 154 Tex. 570, 281 S.W.2d 330, 331 (1955); 1 Roy W. McDonald, Texas Civil Practice § 5.45(a) (1992). In addition, in the absence of a conflict of interest, or of a pleading that they are inadequately represented, the...