Luker v. Arnold

• Decision Date: 14 October 1992
• Docket Number: No. 2-90-089-CV,2-90-089-CV
• Citation: 843 S.W.2d 108
• Parties: Garry Z. LUKER, Sr. and Granbury Properties, Inc., Appellants, v. Jerry ARNOLD, et ux Carlye Arnold, Appellees.
• Court: Texas Court of Appeals

Page 108

843 S.W.2d 108

Garry Z. LUKER, Sr. and Granbury Properties, Inc., Appellants, v. Jerry ARNOLD, et ux Carlye Arnold, Appellees.

No. 2-90-089-CV.

Court of Appeals of Texas Fort Worth.

Oct. 14, 1992.

Rehearing Denied Nov. 24, 1992.

Walton, Brown, Walton, Seilheimer & Reid, P.C., Edwin J. Seilheimer, Granbury, for appellants.

Hill, Heard, Gilstrap, Goetz & Moorhead, Frank Gilstrap, Arlington, for appellees.

Before WEAVER, C.J., and MEYERS and DAY, JJ.

OPINION

MEYERS, Justice.

This is an appeal by Granbury Properties and its president, Garry Z. Luker, Sr., defendants below. A jury found damages in favor of appellees, Jerry and Carlye Arnold, for negligent representation, failure to enforce deed restrictions, and for violations of the Texas Deceptive Trade Practices Act. Appellants are seeking relief from the judgment awarding $59,020.00. In addition, appellants were ordered to pay prejudgment interest and $15,000.00 in attorney's fees.

We affirm the judgment.

In ten points of error, appellants contend the trial court erred in failing to grant their motion for judgment as to the DTPA violations because 1) the appellees are not consumers as to the appellants; 2) and 3) there are no implied or express warranties owed by the developer to develop in a good and workmanlike manner; 4) there was no evidence to support the jury's answer that appellants failed to develop and replat the subdivision in a good and workmanlike manner; and 5) there was no evidence to support the jury's answer that the appellants represented that the septic systems would meet state requirements when, in fact, they did not.

Appellants also contend that: 6) there is no evidence to support the finding of negligent misrepresentation; 7) there is no duty owed by appellants to enforce deed restrictions; and 8) the trial court erred in refusing to credit the amounts paid by the settling co-defendants and refusing to reform the judgment to credit such amounts. Finally, appellants assert that 9) appellees did not have a valid assignment of the Conns' claims and 10) the Conns' assigned claims were barred by the statute of limitations.

In this case, the appellees, along with Robert and Sherilyn Conn, bought five duplexes in the Meadowlark Oaks Addition from John and Janice Billingsley. The Billingsleys had acquired the property from the appellants in a separate transaction. The appellees and the Conns sued both the appellants and the Billingsleys for misrepresentation, negligence, and DTPA violations regarding the property. The Conns assigned their cause of action to appellees. The appellees' claims against the Billingsleys were settled for damages and dismissed with prejudice.

I. CONSUMER STATUS OF APPELLEES

Appellants' first point of error is that the appellees are not consumers under the DTPA. Appellees have the burden of proving their consumer status. Precision Sheet Metal Mfg. v. Yates, 794 S.W.2d 545, 551 (Tex.App.--Dallas 1990, writ denied). Whether or not a party is a consumer is typically a question of law for the trial court, unless some elements are in dispute. See Security Bank v. Dalton, 803 S.W.2d 443, 451 (Tex.App.--Fort Worth 1991, writ denied); Tuscarora Corp. v. HJS Indus., 794 S.W.2d 435, 441 (Tex.App.--Corpus Christi 1990, writ denied).

The definition of consumer is one "who seeks or acquires by purchase or lease, any goods or services." TEX.BUS. & COM.CODE ANN. § 17.45 (Vernon 1987). This definition is further clarified by the supreme court in Cameron v. Terrell & Garrett, Inc., 618 S.W.2d 535 (Tex.1981). Cameron provides two elements to the definition of consumer: 1) the party must have sought or acquired goods or services by purchase or lease; and 2) the goods or services purchased or leased must form the basis of the complaint. Id. at 539; see Herndon v. First Nat'l Bank, 802 S.W.2d 396, 399 (Tex.App.--Amarillo 1991, writ denied) (opinion on reh'g) (using Cameron to define "consumer").

These elements are not in question in this case. Thus, ordinarily the question of whether the appellees are consumers would be a question of law for the trial judge. However, in the instant case, the jury charge contained a special question not encompassed by the Cameron elements. Special Question # 18 reads:

Do you find that Granbury Properties, Inc. and/or Garry Luker, Sr. sought to enjoy a benefit of the transaction in question? [Emphasis added.]

The jury answered "we do not" as to both appellants. Appellees made a motion to disregard the jury's answer to Special Question # 18 which was denied. However, their motion for judgment was granted. Therefore, the trial judge either disregarded the answer as immaterial or determined, sua sponte, that appellees proved this element as a matter of law. TEX.R.CIV.P. 301; U.S. Fire Ins. Co. v. Pettyjohn, 816 S.W.2d 839 (Tex.App.--Fort Worth 1991, no writ) (these are the only two instances when a jury's answer to a special question may be disregarded).

A. Is Special Question # 18 material?

Appellants' argument is that this question is material to the definition of consumer. If the question is material, appellants argue that because of the jury's negative answer appellees failed to prove their consumer status as to appellants.

Appellants rely on Knight v. International Harvester Credit Corp., 627 S.W.2d 382 (Tex.1982) for the language in Special Question # 18. As in this case, Knight involved three parties: a plaintiff and two defendants. Id. at 383. The plaintiff received a purchase money loan from one defendant and used it to buy a truck from the other defendant in a single transaction. Id. at 389. The lender/defendant argued that the plaintiff was not a consumer as to it but the supreme court found to the contrary. Id. The court considered the realities of the transaction and held that the two defendants were inextricably intertwined and that "Knight was a 'consumer' as to all parties who sought to enjoy the benefits of that sale." Id. This is because the lender/defendant supplied all the financing for the seller/defendant's customers; its name appeared on the seller/defendant's sales contract with Knight; it had drafted and supplied Knight's sales contract and most of the seller/defendant's contracts; and a preprinted clause assigning the contract to the lender/defendant was contained in the sales contract. Id.

Appellants argue that because of Knight's treatment of the definition of consumer, it is material in this case whether or not the appellants were so inextricably intertwined with the Billingsleys that they sought to enjoy the benefit of the transaction between the appellees and the Billingsleys. Another case like Knight is Flenniken v. Longview Bank & Trust Co., 661 S.W.2d 705 (Tex.1983). It also involved one plaintiff claiming consumer status as to two defendants. Id. at 706. The Flennikens had acquired the services of one defendant to build them a house. Id. This builder/defendant then assigned his interest in payment to a lender/defendant for financing. Id. The court held that there was only one transaction because the Flennikens were involved solely for the purchase of a house and the assignment was a means of enabling the builder/defendant to build the house and eventually make the sale. Id. at 707. Because of this the Flennikens "were consumers as to all parties who sought to enjoy the benefits of that transaction, including the Bank." Id.

The supreme court confirmed that whether defendants are inextricably intertwined with each other in a DTPA transaction is relevant for the purpose of establishing whether the plaintiff is a consumer to all those defendants. Qantel Business Sys. v. Custom Controls, 761 S.W.2d 302, 305 (Tex.1988). Thus, a plaintiff can be a consumer to one defendant but not a consumer to another defendant, depending on the defendants' relationship with each other. The language in Knight "was made in the context of establishing whether the plaintiff was a consumer with respect to the financing company as well as the seller of the truck involved in the action." Id. The supreme court in Knight, Flenniken and Qantel interpreted and applied the language in Special Question # 18 as material to consumer status. See Holland Mortg. & Inv. Corp. v. Bone, 751 S.W.2d 515, 517-18 (Tex.App.--Houston [1st Dist.] 1987, writ ref'd n.r.e.) (finding a "tie-in" relationship between the builder and lender); Briercroft Serv. Corp. v. De Los Santos, 776 S.W.2d 198, 206 (Tex.App.--San Antonio 1988, writ denied) (opinion on reh'g) (holding that whether the defendants were "inextricably intertwined" is a question of fact). The language is material.

B. When is Special Question # 18 material?

The supreme court has not specifically held when such a question is material. Appellees' second argument is that if the question is material, it is so only when the second Cameron element fails because the goods purchased are not the basis of the complaint. If this is true then the special question is immaterial in this case and was correctly disregarded. Here, the second Cameron element was met since the goods form the basis of the complaint. The goods that form the basis of appellees' DTPA claim are the duplexes' defective septic systems.

There is a basis for appellees' second argument in Briercroft, 776 S.W.2d 198. In Briercroft, the plaintiffs contracted with the builder/defendant to make improvements on their home. Id. at 206. They financed this through the lender/defendant. Id. The plaintiffs could not prove their consumer status as to the lender/defendants because they sought only to borrow money and the lending of money invokes neither a good nor a service. Id. Despite their failure to satisfy the second Cameron element, the plaintiffs argued that the lender/defendant and builder/defendant were inextricably intertwined as an alternate theory to prove their consumer status. Id. The San Antonio Court of Appeals held that there was some evidence to support the jury's...