United Postage Corp. v. Kammeyer
| Decision Date | 13 April 1979 |
| Docket Number | No. 19663,19663 |
| Citation | 581 S.W.2d 716 |
| Parties | UNITED POSTAGE CORP. and Bill N. Raulerson, Appellants, v. Calvin KAMMEYER, Appellee. |
| Court | Texas Court of Appeals |
Toby L. Gerber, Berman, Fichtner & Mitchell, Dallas, for appellants.
Bertran T. Bader, III, Bader & Cox, Dallas, for appellee.
Before GUITTARD, C. J., and STOREY and HUMPHREYS, JJ.
United Postage Corporation and William Raulerson appeal from a judgment awarding treble damages and attorney's fees against them, jointly and severally, for asserted violations of the Deceptive Trade Practices-Consumer Protection Act, Tex.Bus. & Comm.Code Ann. § 17.41 Et seq. Tex.Laws 1975, ch. 62, at 149. We affirm, in part, the judgment against the corporation and reverse and render the judgment against Raulerson.
The defendants contend the judgment should be reversed, because: (1) there is no evidence or insufficient evidence to support answers to special issues; (2) plaintiff is judicially estopped to claim reliance upon the representations; (3) findings to defense issues were improperly disregarded; (4) representations made in the sale of services are not proscribed by the Act; (5) the Act violates due process and protected commercial speech under federal and state constitutions; (6) the measure of damages submitted and found was improper; and (7) the Act does not impose liability upon Raulerson.
This action is governed by subchapter E, Texas Business and Commerce Code as amended effective September 1, 1975. Tex.Laws 1975, ch. 62, at 149. The Act grants a private right of action to a consumer who has been adversely affected by conduct proscribed by the Act, section 17.50; and the legislature has mandated the Act be liberally construed and applied to accomplish its purpose to protect consumers against false, misleading and deceptive business practices. Section 17.44. Certain sections of the Act declare, in general terms, deceptive, misleading or unconscionable conduct to be unlawful. Sections 17.46(a) and 17.50(a)(3). However, we are primarily concerned in this case with section 17.46(b) which proscribes specific acts or conduct.
The transaction out of which the suit arose was plaintiff's purchase of five coin-operated postage stamp vending machines from United Postage Corporation by a written contract dated December 19, 1975. These machines were placed on location during January 1976, by one of the company's professional locators. On January 27, 1976, plaintiff signed an identical purchase agreement for three additional machines, which were also placed on location by the company.
Plaintiff operated his vending route during the remainder of January 1976, and through February and March; thereafter, he serviced the route sporadically until June or July because, by the end of March, he had decided to go out of business. He made this decision, as he testified, because he was spending more time than anticipated, the machines were malfunctioning, and the level of sales was unsatisfactory. Efforts to sell the machines on location proved unsuccessful, so that they were removed to plaintiff's garage where further efforts to sell them as used machines were also unsuccessful.
The alleged deceptive acts and practices occurred before and after purchase of the machines. In November 1975, the corporation placed an advertisement in a Houston Newspaper offering the reader an opportunity to establish himself in a "very profitable" postage stamp vending business. Claiming an investment could be made with safety and "no one has ever lost a dime in United Postage Corporation," it advertised to furnish an investor complete training, dispensing equipment, and routes of established locations to be installed by the company.
Plaintiff responded to the advertisement and received a form letter from the company's Executive Vice-President, William J. Bowman, lauding the merits of the vending machine industry in general and of the postage stamp vending industry in particular, and stating: "Our distributors are collecting thousands of dollars daily from their Postage Stamp vending routes . . .." The letter concluded that a personal interview would be arranged between plaintiff and a company regional director whose functions, among others, would be to determine if plaintiff were qualified to be accepted as a distributor.
An interview was arranged and the regional director, Jerome Walters, made a lengthy and somewhat "canned" sales presentation to plaintiff which contained numerous representations claimed by plaintiff to be false, misleading, and deceptive. According to plaintiff's testimony, Walters represented he was about to choose one additional distributor out of two or three applicants to serve the Houston area; the number of distributors would be limited; plaintiff, if chosen, would be the exclusive distributor in the west side of Houston; the company was ethically operated and set high standards for its personnel and distributors; the company had influence with United States Postal Service; the company would locate machines in high-profit locations and afford the distributor continuing advice and assistance in operation; a route would reach a profit level in six to seven weeks of operation, averaging five to eight vends per machine per day; in the event a distributor became disenchanted, the company would assist in the sale of his established route for which he might expect to receive three times his investment; and the machines were the best in the business and could possibly be sold without any loss as used machines not on location. Plaintiff claimed two additional acts of the company were deceptive and misleading: Walters, though titled regional director by the company, was a commission salesman; and National Discounts, Incorporated, a reference given by the company, proved to be the manufacturer of the machines, and one of its principal shareholders was also a principal shareholder of the company.
In its charge, the court submitted eighteen issues inquiring if the following representations made by the company were (a) false, misleading or deceptive, and (b) relied upon by the plaintiff:
(1) representing that commissioned salesmen were "regional directors";
(2) listing NDI Manufacturing Company as a reference;
(3) representing that distributors of United Postage Corporation are collecting thousands of dollars daily from their postage stamp vending routes;
(4) representing that purchasing a postage stamp vending distributorship would be profitable or highly profitable;
(5) representing that regional directors of UPC are authorized to interview and recommend appointment of distributors for UPC;
(6) representing that UPC has meaningful standards for the purchase of postage stamp vending machines other than sufficient cash to purchase (7) representing that UPC is an ethically operated company;
(8) representing that plaintiff could expect an average of five to eight vends per day per machine;
(9) representing that plaintiff could in time expect an average of in excess of eight vends per day per machine;
(10) representing that plaintiff would have an exclusive geographical distributorship area;
(11) representing that the number of distributors in a particular area is limited;
(12) representing that plaintiff could expect active help, assistance or guidance from UPC with his distributorship after his machines were installed;
(13) representing that a profitable level of vends on the postage machines would be built up in six to seven weeks;
(14) representing that plaintiff could sell his postage stamp vending route for a substantial profit;
(15) representing that UPC had a close working relationship with or influence with the United States Postal Service in the denomination of stamp booklets that would be issued;
(16) representing that no one has ever lost a dime with United Postage;
(17) representing that at the time plaintiff was considering whether to purchase the UPC machines, there were others who were ready to fill his spot;
(18) representing that UPC had already selected or would be in a position to select high profit locations for plaintiff's machines.
The jury found representations (5) and (18) to be not false, that the representation in (9) was not made and that (12) was not relied upon. The remaining issues were answered favorably to plaintiff.
After carefully reading the record of plaintiff's testimony, the newspaper advertisement and the correspondence, we conclude that there is sufficient evidence to support each of the jury findings.
Defendants base their attack on the jury's findings primarily on asserted judicial admissions which, they insist, negate any finding that plaintiff did or could have relied upon the representations made to him. Plaintiff testified that he read and fully understood the terms of the purchase agreement which clearly stated it did not grant exclusive territories, guarantee any specific earnings per machine, and that the purchaser "is not relying on any oral or written expressions, promises or warranties" other than those contained in the agreement. It disclaimed any warranties on the machines, except for the manufacturer's warranty, and set out specific terms of a guaranty by which a purchaser might recover his investment.
The provisions of the agreement could not constitute judicial admissions because they were not made in the course of judicial proceeding. Neither can plaintiff's testimony that he read and understood the agreement be so considered, because he also testified that he nevertheless relied upon the assurances of Walters that the terms would neither be binding upon nor enforced against him. A judicial admission is one which removes the admitted fact from controversy. The testimonial declaration of a party will not be given that effect unless it is deliberate, clear and unequivocal, and it must be considered along with the party's other testimony. Tex-Wis Co. v. Johnson, 534 S.W.2d 895, 901...
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