Justia Consumer Law Opinion Summaries

Articles Posted in Supreme Court of Texas
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In this "highly unusual" personal jurisdiction dispute the Supreme Court held that Texas courts have specific jurisdiction over German automobile manufacturers based on their intentional post-sale tampering with affected vehicles that were owned, operated, and serviced in Texas.The State and several local governments brought civil actions to enforce state environmental laws against Defendants - German automobile manufacturers that intentionally evaded federal emissions standards by embedding illegal emissions-defeating technology in graded vehicles. At issue was whether the manufacturers' contacts with Texas satisfied the constitutional requisites to exercising specific personal jurisdiction. The trial court ruled that the manufacturers were amenable to specific personal jurisdiction in Texas, but the court of appeals reversed. The Supreme Court reversed, holding that where the manufacturers developed the product, controlled the distribution stream that brought the product to Texas, and "called all the shots," the trial court did not err in exercising specific personal jurisdiction over the German manufacturers. View "State v. Volkswagen Aktiengesellschaft" on Justia Law

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In this dispute arising from a fatal treadmill injury, the Supreme Court held that the entity that purchased the treadmill manufacturer's assets did not assume an implied warranty of merchantability that attached, and was not disclaimed, when the manufacturer sold the treadmill.The Seller in this case manufactured and sold treatments. The Buyer purchased the Seller's assets and assumed certain of its liability and obligations, as identified in the asset-purchase agreement. While using a treatment the Seller had previously sold to a gym, Audrey Kouba fell and sustained fatal injuries. Kouba's heirs sued the Buyer for negligence, strict liability, and breach of the implied warranty of merchantability. The trial court granted summary judgment for the Buyer on all claims. The court of appeals reversed as to the implied warranty of merchantability claim, holding that, under the asset-purchase agreement's terms, the Buyer assumed liability for implied warranties. The Supreme Court reversed, holding (1) an asset purchaser inherits none of the asset seller's liability absent an agreement to do so; and (2) based on the plain and unambiguous language of the asset-purchase agreement, the Buyer's express assumption of the written warranty for repair or replacement of defective treatment parts was not an assumption of the implied warranty of merchantiability. View "Northland Industries, Inc. v. Kouba" on Justia Law

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The Supreme Court reversed the decision of the court of appeals affirming the judgment of the trial court that Plaintiff’s implied warranty claim was actionable only under the Deceptive Trade Practices-Consumer Protection Act (DTPA), Tex. Bus. & Com. Code 17.41-17.63, holding that the claim for breach of implied warranty of good and workmanlike repairs in this case was not brought under the DTPA and thus was not covered by the DTPA’s two-year limitations period.Plaintiff sought damages for injuries to himself and his small plane when the plane’s engine failed and it crash-landed. Defendant moved to strike Plaintiff’s petition, arguing that the DTPA’s two-year statute of limitations applied. The trial court agreed with Defendant and struck the petition. The court of appeals affirmed. The Supreme Court reversed, holding that Plaintiff’s breach of implied warranty claim was not barred by the DTPA limitations period. View "Nghiem v. Sajib" on Justia Law

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The Supreme Court held that Plaintiff, rather than his Bank, must suffer the financial consequences of the complete draining of Plaintiff’s bank account by an identity theft through a series of fraudulent transactions.At issue was Tex. Bus. & Com. Code 4.406(c), which limits the liability of a bank when the customer fails to comply with his or her duties to examine the statement of account and notify the bank of any unauthorized payment. Rather than monitor his account as contemplated by the statute, for more than a year Plaintiff failed to look for missing bank statements or inquire about the status of his account. The court of appeals rendered judgment for Plaintiff, holding that the Bank neither sent the statements to Plaintiff nor made them available to him, and therefore, his statutory duties to examine the statements and report unauthorized transactions never arose. The Supreme Court reversed, holding (1) the Bank made the statements “available” to Plaintiff for purposes of section 4.406; and (2) under the circumstances, section 4.406 precluded Plaintiff’s attempt to hold the Bank liable for the losses. View "Compass Bank v. Calleja-Ahedo" on Justia Law

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In this case involving an arbitration provision in short-term loan contracts the Supreme Court affirmed the judgment of the court of appeals ruling (1) the borrowers’ claims against the lender came within the arbitration provision, and (2) the lender did not waive its right to arbitrate by providing information to the district attorney that checks written to the lender by the borrowers had been returned for insufficient funds.The borrowers sued the lender, claiming that the lender wrongfully used the criminal justice system to collect unpaid loans by filing false charges against them. The lender responded by filing a motion to compel arbitration. The trial court denied the motion, concluding that the arbitration clause was inapplicable because the borrowers' claims related solely to the lender’s illegal use of the criminal justice system and that the lender waived its right to arbitration by substantially invoking the judicial process. The court of appeals reversed. The Supreme Court affirmed, holding (1) the borrowers’ claims were within the scope of the arbitration provision; and (2) the lender did not substantially invoke the judicial process, and therefore, there was no evidence to support the trial court’s finding the the lender waived its right to arbitrate. View "Henry v. Cash Biz, LP" on Justia Law

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This case arose from an allegedly forged home-equity loan. Plaintiff sued the lenders, bringing several claims, including statutory fraud and violations of the Texas Finance Code and Texas Deceptive Trade Practices Act. The trial court granted summary judgment for the lenders without stating its reasons. The court of appeals affirmed. The Supreme Court affirmed in part and reversed and remanded in part, holding that the court of appeals (1) properly affirmed summary judgment on Plaintiff’s constitutional forfeiture claim; and (2) erred in holding that Plaintiff’s remaining claims were barred on statute of limitations and waiver grounds. View "Kyle v. Strasburger" on Justia Law

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In 2004, the Woods obtained a $76,000 home-equity loan secured by their homestead. Nearly eight years later, the Woods notified the note holder, HSBC, and loan servicer, Ocwen that the loan did not comply with the Texas Constitution because the closing fees exceeded 3% of the loan amount. Neither of the lenders attempted to cure the alleged defects. In 2012, the Woods sued, seeking to quiet title and asserting claims for constitutional violations, breach of contract, fraud, and a declaratory judgment that the lien securing the home-equity loan is void, that all principal and interest paid must be forfeited, and that the Woods have no further obligation to pay. The trial court granted the lenders summary judgment and the court of appeals affirmed, citing the statute of limitations. The Texas Supreme Court reversed in part.“No . . . lien on the homestead shall ever be valid unless it secures a debt described by this section[.]” TEX. CONST. art. XVI, § 50(c). This language is clear, unequivocal, and binding. Liens securing constitutionally noncompliant home-equity loans are invalid until cured and thus not subject to any statute of limitations. The Woods do not, however, have a cognizable claim for forfeiture. View "Wood v. HSBC Bank USA, N.A." on Justia Law