Sam Montgomery Oldsmobile Co. v. Johnson

• Decision Date: 13 August 1981
• Docket Number: No. 17747,17747
• Parties: SAM MONTGOMERY OLDSMOBILE COMPANY, Appellant, v. R. L. JOHNSON et al. and Champion Home Builders Company, Appellees. (1st Dist.)
• Court: Texas Court of Appeals

Page 237

624 S.W.2d 237

SAM MONTGOMERY OLDSMOBILE COMPANY, Appellant, v. R. L. JOHNSON et al. and Champion Home Builders Company, Appellees.

No. 17747.

Court of Civil Appeals of Texas, Houston (1st Dist.).

Aug. 13, 1981.

Rehearing Denied Sept. 24, 1981.

Hester, Stevenson, Aman, Shipp & Jonte, S. Lee Stevenson, Houston, for appellant.

Archer & Peterson, Paul F. Waldner, Barrow, Bland & Rehmet, James I. Smith, Jr., Houston, for appellees.

Before DOYLE, EVANS and WARREN, JJ.

DOYLE, Justice.

This is an appeal from a judgment awarding appellees, R. L. Johnson, N. F. Renaud and Jay A. McMahon, treble damages and attorney's fees under the Texas Deceptive Trade Practices Act (DTPA or Act) against appellant Sam Montgomery Oldsmobile Company (Montgomery) and granting appellee Champion Home Builders Co., (Champion) indemnity and attorney's fees against Montgomery.

Trial was to the court. Findings of fact and conclusions of law were filed and signed by the trial judge on May 6, 1980, and are a part of the record before us, contrary to the allegations of appellees and Champion in their briefs. Montgomery filed motions for summary judgment, indemnity against Champion and a new trial, all of which were denied. Nine points of error are presented on appeal.

Several volumes of testimony were adduced at the trial, which we shall summarize. In the spring of 1977, appellees, who were close personal friends and officials of the Operating Engineers Union in Houston, Texas, decided to jointly purchase a motor home for their personal use and to lease for profit. After visiting several dealers, they went to Montgomery and consulted with that company's salesperson, Peggy Bates. They informed her why they wanted a motor home and were shown a 1976 Champion motor home by Ms. Bates. Appellees purchased the motor home from Montgomery in June of 1977. Immediately they began experiencing problems with it. Appellee Renaud went to Montgomery to pick up the vehicle but was told it would not run because the battery was dead and the fuel pump was broken. Several days later it was brought back for servicing and a written list of complaints was given to the service manager. During the next six-week period the motor home was brought in on six more occasions with numerous mechanical and equipment problems. The most prevalent problem was that there was some sort of malfunctioning in the fuel line and the vehicle would not run. During the time the motor home was in Sam Montgomery's service department, appellee Johnson witnessed its being damaged by Montgomery personnel when a porter backed it into another coach and also witnessed evidence of poor workmanship. Appellees had entered into a leasing agreement with a local company to lease the motor home in June of 1977 but were never able to lease it because of the recurrent mechanical problems. The equipment and mechanical problems with the motor home were so severe that the actual market value of the home was reduced by approximately 30%.

The motor home was a 1976 Champion model which had been manufactured by appellee Champion, a builder of a line of recreational vehicles. Champion sold the motor home to Montgomery in May or June of 1976. It is to be noted that Champion drove the vehicle 800 miles from Thomasville, Georgia, to Houston for delivery to Montgomery. When Montgomery accepted delivery of the vehicle from Champion, it was inspected and signed for as being free from substantial defects in materials and workmanship and free from shortage or damages. The vehicle remained on Montgomery's sales lot for eleven months prior to its sale to appellees, during which time no regular maintenance was performed to keep it in its original good condition. During this eleven-month period various parts and fixtures were taken from the motor home and used on other vehicles. By the time the vehicle was sold to appellees, many of these parts had been replaced by other than new factory parts and some items, such as doors, had been fabricated by Montgomery in its shop. There is testimony that appellees concluded that Montgomery was either incapable of or had no intention of making the necessary repairs and appellees resorted to other companies to perform the corrective work.

Against this background of facts, Montgomery contends that everything that happened to the motor home was the fault of Champion and that any problems that resulted from its eleven-month period on the company's sales lot was corrected by Montgomery's make-ready procedure. Champion denies all liability for any damages suffered by appellees and argues that after the 800 mile trip from Thomasville to Houston, any defects in material and workmanship, as well as any mechanical malfunctions, would have likely been revealed. To the contrary, Champion points out, Montgomery's sales manager, Mr. Thomas, testified that when the vehicle was delivered to Montgomery in Houston, he inspected it and found it free from shortage, damage and substantial defects in material and workmanship and that he signed the check-out sheet attesting to these facts.

Montgomery's first seven points of error are directed at the trial court's findings that the evidence was sufficient to support its conclusions that deceptive trade practices had occurred and were a producing cause of appellee's damages. Initially, Montgomery complains that the court erred in finding that the misdescription of the vehicle was a violation of the DTPA and constituted a breach of implied warranty causing a part of appellees' damages. This claim has no foundation in the court's findings or conclusion. The court's specific findings on this point were to the effect that Champion was the party who made the clerical error in wrongly identifying the vehicle as a Concord model when, in fact, it was a Champion model but that such "mistake in title was not a producing cause of the damage sustained by Plaintiffs." Point of error number one is overruled.

Montgomery next insists that the practice of cannibalization i. e., the practice of taking parts off one vehicle and using such parts to make another vehicle ready for sale, was not a deceptive trade practice. Conceivably, such a practice may be conducted in such a manner that no problem would be encountered. To temporarily "borrow" parts from one vehicle and later replace such parts with identical factory duplicates would pose few, if any, complaints. However, the testimony before us shows not only that cannibalization took place with parts from appellees' motor home but that such parts were not replaced with factory replacement items matching the original specifications. Some replacements were fabricated by Montgomery's workmen resulting in a host of mismatching and misfitting problems with doors, trim, paint and varnish. Many of the defects in material and workmanship appeared after delivery and usage. The motor home was sold to appellees as a new vehicle with no disclosure to appellees that replaced parts on their vehicle were not factory but had in fact been fabricated by Montgomery. This constitutes a deceptive trade practice as defined by § 17.46(a) of the Act.

We can not agree with Montgomery's position that the court erred in holding that it committed a deceptive trade practice by failing to voluntarily tell the appellees that the motor home had been located on its sales lot for eleven months without any regular maintenance. Montgomery's argument is that such a disclosure was not mandated until the 1979 amendment to the Act became effective, which was after appellees' cause of action arose. The non-disclosure occurrence here involved falls within the general ambit of the Act as set forth in § 17.46(a). The basic purpose of this Act, as shown by the legislative intent was to guarantee to the consumer the greatest possible knowledge about any potential undesirable features of a product. Texas courts have followed the Federal Trade Commission and federal courts in applying the Act. Our Supreme Court in Spradling v. Williams, 566 S.W.2d 561, 563 (Tex.1978) had the occasion to hold that the representation of the model of a boat to be for the year 1973 instead of 1972, was a deceptive trade practice. There was evidence that the defendant Williams had relied on the representations as to model and price. The Court cited Florence Mfg. Co. v. J. C. Dowd and Co., 178 F. 73, 75 (2nd Cir. 1910);

The law was not made for the protection of experts, but for the public-that vast multitude which includes the ignorant, the unthinking and the credulous, who, in making purchases, do not stop to analyze, but are governed by appearances and general impressions.

This same rationale underlay the holding of our Supreme Court in Jerry D. Cameron, et ux v. Terrell and Garrett, Inc., Tex., 618 S.W.2d 535 (1981). There the plaintiffs had been told a house contained 2400 square feet of space when in fact it contained only 2245 square feet. The testimony showed that the plaintiffs relied on the representation, based the purchase on such footage and would not have purchased the house had ...