Raye v. Fred Oakley Motors, Inc., 05-81-01324-CV

• Decision Date: 18 January 1983
• Docket Number: No. 05-81-01324-CV,05-81-01324-CV
• Parties: Arnold D. RAYE, Appellant, v. FRED OAKLEY MOTORS, INC., Appellee.
• Court: Texas Court of Appeals

Page 288

646 S.W.2d 288

Arnold D. RAYE, Appellant, v. FRED OAKLEY MOTORS, INC., Appellee.

No. 05-81-01324-CV.

Court of Appeals of Texas,

Dallas.

Jan. 18, 1983.

Larry Feldman, Dallas, for appellant.

Nathan K. Griffin, Dallas, for appellee.

Before STOREY, SPARLING and WHITHAM, JJ.

SPARLING, Justice.

In a suit brought under the Deceptive Trade Practices Act, the jury awarded Raye, appellant, $3,500.00 in damages plus attorney's fees. Appellee, Oakley Motors, moved for judgment notwithstanding the verdict, claiming that there was no evidence of misrepresentation or breach of warranty by Oakley Motors, and that the damage special issue submitted an improper measure of damages. The motion for judgment NOV was granted, and a take nothing judgment rendered against Raye. We agree that the damage issue submitted an improper measure of damages and affirm the judgment of the trial court.

Raye agreed to purchase a Dodge van from Oakley Motors in December, 1978. While Raye was arranging the financing of the van, a motorist drove his car into the van while it was parked on the Oakley Motors lot. Raye observed the damage and then accepted delivery of the damaged van in reliance on Oakley Motor's promise to repair. Although repairs were made, Raye asserted that he was not satisfied with the repairs. Raye kept possession of the van and sued for damages in the amount of $12,000, which represented the amount of the note executed to a bank for the purchase price of the van. The jury found that Oakley Motors made material misrepresentations and breached a warranty. It awarded damages "[f]or the monies which Plaintiff [Raye] is obligated to pay in the future to Bank in connection with purchase money loan on the automobile." The jury thus awarded an amount equal to the unpaid portion of the purchase money note, but refused to award the amount already paid on the note. Section 17.50(b)(1) of the Deceptive Trade Practices Act, 1973 Tex.Gen.Laws, ch. 143, § 1, at 327, (amended 1979), provides that a consumer who prevails under the Deceptive Trade Practices Act may obtain the amount of actual damages found by the trier of fact. "Actual damages," though not defined by the act, means damages recoverable at common law, Brown v. American Transfer & Storage Co., 601 S.W.2d 931, 939 (Tex.1980), cert. denied, 449 U.S. 1015, 101 S.Ct. 575, 66 L.Ed.2d 474 (1980); United Postage Corp. v. Kammeyer, 581 S.W.2d 716, 722 (Tex.Civ.App.--Dallas 1979, no writ).

Generally, the measure of actual damages is the difference in the market value of the product or service in the condition in which it was delivered and its market value in the condition in which it should have been delivered according to the contract of the parties, Wright v. Davenport, 44 Tex. 164, 167 (1875); Valley Datsun v. Martinez, 578 S.W.2d 485, 490 (Tex.Civ.App.--Corpus Christi 1979, no writ). A notable exception to the rule may exist when the product is rendered valueless as a result of the defect--then the purchase price is the appropriate measure of actual damages. Chrysler Corp. v. Schuenemann, 618 S.W.2d 799, 805 (Tex.Civ.App.--Houston [1st Dist.] 1981, writ ref'd n.r.e.). Likewise, when a warrantor's repairs are valueless, the cost of those repairs becomes a proper measure of actual damages, Smith v. Kinslow, 598 S.W.2d 910, 913 (Tex.Civ.App.--Dallas 1980, no writ). The market value of the sold item or the market value of the cost of repairs may be established by the price set by the vendor or warrantor, under the assumption that the price he set was not in excess of market value, Smith, 598 S.W.2d at 914. This equation--cost equals market value--may also be found in a hybrid form of the difference-in-value theory of actual damages. Stated differently, "[t]he correct measure of damages ... [may be] the difference between the amount actually paid [by the defrauded party] ... and the fair market value of the [item] as delivered." (emphasis supplied) Sobel v. Jenkins, 477 S.W.2d 863, 868 (Tex.1972); Jack Criswell Lincoln-Mercury, Inc. v. Haith, 590 S.W.2d 616, 619 (Tex.Civ.App.--Houston [1st Dist.] 1979, writ ref'd n.r.e.).

Appellant cites Woo v. Great Southwestern Acceptance Corp., 565 S.W.2d 290 (Tex.Civ.App.--Waco 1978, writ ref'd n.r.e.) and United Postage Corp. v. Kammeyer, 581 S.W.2d 716 (Tex.Civ.App.--Dallas 1979, no writ) as authority for the present measure of damages, namely, the purchase price of the van, or a portion thereof. In Woo, actual damages were sought under the Deceptive Trade Practices Act for misrepresentations made in the sale of a self-improvement motivational distributorship to plaintiff Woo. The court held that the actual damage was the purchase money for the distributorship, reduced by the money Woo earned from the distributorship. This amount was trebled as required by § 17.50(b)(1) of the Deceptive Trade Practices Act, 1973 Tex.Gen.Laws, ch. 143, § 1, at 327, (amended 1979).

In contrast, this court in United Postage Corp., sustained recovery of the purchase money under § 17.50(b)(3) of the Deceptive Trade Practices Act, 1973 Tex.Gen.Laws, ch. 143, § 1, at 327, (amended 1979), ¹ which neither depends on a finding of actual damages nor allows the amount to be trebled. The rationale for the utilization of subsection (3) was that "actual damages" could not be ascertained with reasonable certainty when the subject of the misrepresentation was a going business with no history of operation.

The implied rationale of Woo is that the distributorship, like the business in United Postage Corp., was incapable of evaluation because of the inherent nature of the business--both cases held that recovery was the amount of consideration paid, yet Woo held § 17.50(b)(1) was the section under which this should be accomplished and United Postage Corp., held that § 17.50(b)(3) was applicable.

We need not choose which subsection of § 17.50(b) is applicable for the return of purchase money because the jury was charged in the present case to determine what sum of money would compensate appellant "for his damages, if any, resulting from the...