Deceptive Trade Practices Act

/Deceptive Trade Practices Act

Defendant has my property, how do I get it returned under ‘Conversion’?

A related cause of action is ‘conversion’, generally described as a Plaintiff who owned or possessed or had the right to immediate possession of personal property, with Defendant wrongfully exercising dominion over it, with Plaintiff suffering injury. Earlier, this theory was called suing “in detinue” or “in trover”, although we do not use these any longer, it merely being called ‘conversion’. Green International v. Solis 951 SW2d 384 (Tex. 1997).

Ownership of property may be proved by evidence that Plaintiff purchased the property, or under the UCC, Plaintiff can have legal possession of property. Intern’l Freight v. American Flange (San Antonio 1999); Ward v. Shriro (Dallas 1978).

Establishing that the property was personal property includes showing that it was money, being a specific chattel, or a specific deposit in a bank. This is opposed to a ‘general deposit’ in a bank, which is how funds are usually deposited, where a specific deposit would be a deposit accompanied by an agreement that an identical deposit will be paid out for specific purpose. Since it is still the property of the depositor, it can be concerted. This theory is usually applied to a suit against a bank that improperly applies funds on deposit. Also, a security deposit can be converted, and insurance policy proceeds can be converted. Stock certificates can be converted, and legal instruments such as titles, such as to an automobile, can be converted.

Confidential information such as trade secrets or customer lists can be converted. Chandler v. Mastercraft (Ft. Worth 1987). A conversion also occurs when a party exercises dominion and control over the collateral property subject of a security agreement. Crutcher v. Continental (El Paso 1994). Mineral interests, oil and gas, severed from the realty become personal property and can be converted. Santanna Nat. Gas v. Hamon (Austin 1997). If property that is a fixture’ is severed from the property, is becomes personal property and can be converted.

Settlement funds that are paid and meant to be paid to the carrier, as a reimbursement, can be converted. In one collections case, the carrier successfully sued for reimbursement against the third-party tortfeasor, the injured employee, and the employee’s attorney. Estrada v. Wausau 985 SW2d 480 (San Antonio 1998). Animals can be converted, but not wild animals since they cannot be confined.

Some property is not subject to a conversion claim, such as intangible property, such as a trade name, or a mis-directed email communication, or real property, or fixtures. Plaintiff must show that ‘wrongfully acquired possession’ means that the property was taken without the owner’s consent. Lone Star Beer v. 1st National (El Paso 1971). Plaintiff must also show that he demand return if Defendant originally took possession legally. Usually however, demand by Plaintiff is not necessary if Defendant’s acts amount to a clear repudiation of Plaintiff’s rights, and a demand would be useless. Also, Plaintiff must show that the acts were the proximate cause of injury to Plaintiff.

Contact Us

If you have any questions about this topic, or need help with business debt collections in Dallas Texas, We Can Help – Give Us a Call:  214-752-8800 or Email Us: sam@samemerick.com

*The foregoing is not intended to provide specific legal advice, but instead only as a generalized discussion

Sam Emerick, Collections Attorney

Sam Emerick has over 35 years
experience in Commercial Collections Law,
Factoring Litigation and Wills, Trusts & Probate

 

 

How I would Expect an Interferer to Defend the Charge? And What Damages Can be Recovered?

 

Q- How I would expect an interferer to defend the charge?

A Defendant sued for tortious interference may try to defend himself by alleging that the damages were actually Plaintiff’s fault. Southwestern Bell v. John Carlo 813 SW2d 613 (Houston 14th Dist 1991). Here, Defendant alleges that the Plaintiff’s own acts or omissions caused, or contributed to, Plaintiff’s injuries. Defendant may also asset an affirmative defense of privilege, or legal justification. A Defendant alleging privilege, says that he is exercising his own rights in good faith, or has a right that is equal to or greater than that of the contracting parties to the contract. Also, to be considered, is the potential of defense that the Defendant intentionally causing a person not to perform a contract, may not be liable for interference, if he is giving truthful information or honest advice within the scope of a request for advice.

Defendant may also assert the defense of justification. Defendant may be justified in interference if the Defendant is exercising his own legal rights or a good faith claim to a colorable legal right even if he ultimately proves to be mistaken. In the case of Calvillo vs. Gonzalez 922 S.W. 2nd 928, 929 (Tex. 1996) the Defendant’s exclusive contract to operate and staff an anesthesia department gave him the legal right to prevent the hospital from contracting with another anesthesiologist. This is a justification case. On the issue on whether the Defendant has a good faith claim to a colorable legal right, “good faith” means having an objectively well-grounded and justifiable belief of a right. “Colorable legal right” is defined as an appearance of a right that would lead others, without inquiry, to suppose the right exists. Defendant may also plead mitigation of damages to reduce the damages. Bennett v. Computer 932 SW2d 197 (Amarillo 1996).

Q- What sort of damages can be recovered?

Damages, such as lost benefits of the contract, are recoverable, where the court measures the pecuniary loss of the benefit of the contract. The standard measure of actual damages for tortious interference with existing contract is measured the same as for breach of contract, in other words, putting the Plaintiff in the same economic position that he would have been in had the contract been performed. In Boyles vs. Thompson, 585 S.W.2d 821, 835 (Tex. Civ. App-Ft. Worth 1979, no Writ), the tortious interference damages were calculated as the exact amount that the Plaintiff would have earned had the contract been completed. Also, tortious interference damages in the context of businesses generally fall under the categories of Plaintiff’s lost profits, requiring reasonable certainty as to the damages without speculation, and in the evidence of a precise calculation of those anticipated profits, Plaintiff may introduce evidence of Defendant’s profits, which can obviously relate to the profits Plaintiff may have made. In addition, Plaintiff may allege and recover exemplary damages, plus interest and court costs, but attorney’s fees are not available unless otherwise permitted under a difference statute or law.

Contact Us

If you have any questions about contract interference, or need help with business debt collections in Dallas Texas, We Can Help – Give Us a Call:  214-752-8800 or Email Us: sam@samemerick.com

*The foregoing is not intended to provide specific legal advice, but instead only as a generalized discussion

Sam Emerick, Collections Attorney

Sam Emerick has over 35 years
experience in Commercial Collections Law,
Factoring Litigation and Wills, Trusts & Probate

 

What is Meant by ‘Intent to Interfere’? And how does the Court look at whether the act actually ‘caused’ an injury?

Q- what is meant by ‘intent to interfere’?

Plaintiff also has the burden to show that the intent to interfere amounted to a knowing inducement or hindrance. This would be established by the Defendant intentionally inducing or causing a third party to breach its contract. The Supreme Court analyzing intentional interference is Clements vs. Withers 437 S.W. 2d 818, 820 (Tex.1969). Also, a Defendant can be liable by either preventing the performance of, or by making the performance impossible or more burdensome, difficult, or expensive. In a Houston (1st District) appellate case from 1984, Hughes vs. Houston N.W. Med. Ctr., Defendant was liable for interfering, in that his interference delayed a closing of a sale which made a certain transaction less valuable.

Q- how does the Court look at whether the act actually ‘caused’ an injury?

The last elements of proximate cause, and injury, are more straight-forward. The proximate cause element is usually a question of fact and, of course, includes cause-in-fact and foreseeability. Cause-in-fact is also called “but-for causation”, and asks whether the negligent act or omission, was a substantial factor in bringing about the injury, and whether the injury would have occurred without the act or omission. The foreseeability aspect asks whether a person of ordinary intelligence should have anticipated the danger created by the negligent act or omission. In interference cases, Plaintiff proves that the Defendant actually took an active part in persuading the party to breach its contract, and that mere proof that Defendant benefitted somehow from the broken contract, however, is not sufficient. On the issue of damages, oftentimes expert testimony will be used to determine value before and after the interference.

Contact Us

If you have any questions about contract interference, or need help with business debt collections in Dallas Texas, We Can Help – Give Us a Call:  214-752-8800 or Email Us: sam@samemerick.com

*The foregoing is not intended to provide specific legal advice, but instead only as a generalized discussion

Sam Emerick, Collections Attorney

Sam Emerick has over 35 years
experience in Commercial Collections Law,
Factoring Litigation and Wills, Trusts & Probate

 

What kind of ‘interference’ with a contract is the Court looking for?

The next element that Defendant willfully and intentionally interferred, contains several elements also. First, the Defendant must be a stranger to the contract, in order to tortiously interfere with it. A Defendant cannot tortiously interfere with its own contract. In the corporate context, a corporate agent, accused of interfering with the corporation’s contract, must be proven to have willfully and intentionally served his own personal interest at the corporation’s expense. Powell Indus v. Allen 985 SW2d 455 (Tex. 1998). It has been held in Texas that a corporate agent’s mixed motives, i.e. that benefit both himself and the corporation are insufficient to establish such liability. Obviously, it is for the corporation to complain about the agent’s actions. The Texas Supreme Court case of Holloway vs. Skinner (Tex.1995) is often quoted as authority in tortious interference cases. On the issue of corporate agency interference, the Holloway case stands for the proposition that it is a close question whether to require a Plaintiff to prove or the Defendant to disprove, that Defendant interfered with the contract for personal reasons, but for reasons discussed in the case, the Supreme Court felt that the burden was better placed on the Plaintiff to prove that the agent acted willfully and intentionally to serve his own personal interests. It will also be Plaintiff’s burden to prove that the interferring Defendant had actual knowledge of the contract, or had knowledge of facts and circumstances that would lead a reasonably prudent person to believe there was a contract in which Plaintiff had a protectable interest. A Defendant ignorant of the contract’s existence, therefore, cannot interfere with the contract.

Next, Plaintiff must show Defendant’s interference. Such intentional is only actionable if it is intentional. Such intent is said to be an intent to interfere, i.e. to cause a breach of contract. This is different than requiring proof that the Defendant intended to injure, but requires that Defendant wanted to cause the consequences of his act or, in other circumstances, that certain consequences were substantially certain to result from his acts. Greenville Automatic v. Automatic Propane Dallas 2015).

Contact Us

If you have any questions about contract interference, or need help with business debt collections in Dallas Texas, We Can Help – Give Us a Call:  214-752-8800 or Email Us: sam@samemerick.com

*The foregoing is not intended to provide specific legal advice, but instead only as a generalized discussion

Sam Emerick, Collections Attorney

Sam Emerick has over 35 years
experience in Commercial Collections Law,
Factoring Litigation and Wills, Trusts & Probate

Intentional Interference with an Existing Contract

This series of blogs will discuss the tort of Intentional Interference with an existing Contract. This is slightly different than the tort of Intentional Interference with Prospective Business Relations, however. The elements of an action for tortious interference with an existing contract are as follows:

  1. Plaintiff had a valid contract

  2. Defendant willfully and intentionally interfered with the contract

  3. The interference proximately caused injury to Plaintiff

  4. Actual damages were incurred as a result

Prudential Insur. V. Financial 29 SW3d 74 (Tex. 2000); Holloway v. Skinner 898 SW2d 793 (Tex. 1995).

Q- does not the contract allegedly interfered with have to have to be a valid contract?

The first element of valid contract seems rather obvious, the existence of a valid contract, however, there are always twists and turns even in this element. For instance, Defendant cannot be liable for tortiously interfering with a void contract. Contracts that are illegal or against public policy are void, and not considered contracts at all. A contract is illegal if the performance of the contract will result in a violation of a law or statute, or if the contract is contrary to public policy, or if the contract is an agreement to use the subject matter for an unlawful purpose. An example of a contract against public policy, would be one where a contract is an unreasonable restraint of trade and, therefore, unenforceable on public policy grounds.

The above void contract should be distinguished from voidable contracts, however. A contract may be the subject of an interference cliam even though it is unenforceable, i.e. voidable, between the contracting parties. Voidable contract examples would be contracts voidable because of the statute of frauds, or lack of mutuality, or because one of the parties was a minor, or because of formal defects in the contract, because of unconscionability concerns, or because conditions precedent had not occurred, and the like. A Defendant cannot for those reasons stated, interfere with a performance of a contract before the contract is voided. A Defendant may also tortiously interfere with a terminable-at-will contract. Juliette Fowler Homes v. Welch 793 SW2d 660 (Tex. 1990).

Contact Us

If you have any questions about business disparagement or need help with business debt collections in Dallas Texas, We Can Help – Give Us a Call:  214-752-8800 or Email Us: sam@samemerick.com

*The foregoing is not intended to provide specific legal advice, but instead only as a generalized discussion

Sam Emerick, Collections Attorney

Sam Emerick has over 35 years
experience in Commercial Collections Law,
Factoring Litigation and Wills, Trusts & Probate

Is the Defendant “Privileged”? And What Damages Can I Recover?

Q- Is the Defendant “privileged”? i.e. does he have an excuse to say these things?

Plaintiff must also establish that the disparaging words were communicated without privilege. Although the law is a bit unsettled in Texas, it appears that plaintiff has the burden to negate privilege. The idea that privilege is a defense to a business disparagement claim, the Restatement of torts 2d states that defendant has the burden of proving that the publication was absolutely or conditionally privileged. Whether privilege is a defense or not, depends on whether the privilege is absolute or qualified. Defamation cases are helpful here, as there are many different types of absolute privileges, because when alleging an absolute privilege, the motivation behind the communication is irrelevant. Therefore, an absolute privilege is not lost even when the communication is false, or the words were expressed with malice. Absolute privilege almost always applies only to certain governmental functions, and include legislative and judicial proceedings.

On the other hand, there is the notion of qualified privilege. Defendant cannot assert the defense of qualified privilege, because you will carry the burden of proving malice, which defeats the qualified privilege.

Q- let’s talk about what damages I can recover.

Lastly, you must establish that the word, statement, or communication, caused special damages. Without proof of special damages, there is no claim in Texas. Special damages are pecuniary losses, suffered by plaintiff, that have been actually realized, or are liquidated. An example would be a specific sale that was lost. Proving special damages involves plaintiff proving its evidence of direct pecuniary loss, attributable to the false communication. In addition, the Federal Fifth Circuit has held that such pecuniary loss must be greater than the attorney’s fees incurred to bring such does business disparagement case. In a 1996 Fifth Circuit case, the Court has also held that under Texas law, plaintiff must prove that the disparagement caused a direct pecuniary loss. That is, plaintiff must establish that the communication or statement played a substantial part in inducing others not to deal with plaintiff. Hurlbut v. Gulf 749 SW2d 762 (Tex. 1987).

Contact Us

If you have any questions about business disparagement or need help with business debt collections in Dallas Texas, We Can Help – Give Us a Call:  214-752-8800 or Email Us: sam@samemerick.com

 

*The foregoing is not intended to provide specific legal advice, but instead only as a generalized discussion

 

Sam Emerick, Collections Attorney

 

 

 

 

 

 

Sam Emerick has over 35 years
experience in Commercial Collections Law,
Factoring Litigation and Wills, Trusts & Probate

Deceptive Trade Practices Act – Who Can Sue, And For What – Part 2 of 2

Next case, a lottery ticket buyer sues the lottery ticket seller, under DTPA, but court says no, the ticket is neither a good nor a service, it only represents the right to participate in the drawing. Kinnard 966 SW2d 613 (San Antonio 1998).

Next case, an oil company sues a supply company, alleging poor quality, court says DTPA suit OK, b/c P’s agent purchased a pipe, which is a good, and the pipe formed the basis of its complaint alleging poor pipe quality. Reed 681 SW2d 228 (Houston 1st, 1984).

Next case, parents of a child who drowned in a pool, sued the pool builder about the pool alarm, but court says no DTPA suit, b/c D P never contacted builder about purchasing an alarm, and also, P could not sue as a representative of the child’s estate b/c DTPA actions do not survive. Lukasik 21 SW3d 394 (San Antonio 2000).

Next case, for Texas collections, infant’s parent sue under DTPA re: supplemental oxygen for the infant, court says OK, b/c the oxygen was a ‘good’, and infant ‘acquired’ the oxygen b/c her parent purchased it for her. Birchfield 747 SW2d 361 (Tex. 1987).

Next case, a homeowner sued under DTPA suing the real estate agent, court says OK, b/c the home was a ‘good’ and formed the basis of the complaint, which was for misrepresented square footage. Cameron 618 SW2d 159 (Tex. 1981).

Next case, homeowners due under DTPA suing the land developer, court says OK, b/c although the P did not purchase the home from developer,, P was a consumer in relation to the D, b/c D sought to benefit from the sale of the home. Parkway co. 857 SW2d 903 (Houston 1st 1993).

Next case, the car owner sues for faulty repairs, suing the dealership under the DTPA, court says OK under DTPA, b/c although the repairs were covered under a warranty, the P was a consumer, and the repairs formed the basis of the complaint. Jones 45 SW3d 350 (Houston 1st 2001).

Deceptive Trade Practices Act – Who Can Sue, And For What – Part 1 of 2

In this blog we will address certain aspects of the Texas DTPA, Tex. Bus. & Comm. Code sec. 17.46. Generally, the DTPA is to be liberally applied, to promote its purpose of protecting ‘consumers’ from false, misleading, and/or deceptive business practices. We will take a quick look and ask whether the Plaintiff is in fact a ‘consumer’, and whether they can sue under the DTPA.

First case, a used car dealer sued the car auctioneer when the car purchased turned out to be stolen. Court said yes, the car was ‘goods’. And the car formed the basis of the complaint, and suit was for breach of warranty of good title. Big H Auto 665 SW2d 756 (Tex. 1984.)

Next case, the Employer of an employee who rented a car from a car rental agency, was allowed to sue the car rental company under the DTPA, because Plaintiff’s agent was acting as an agent for Employer when he rented the car, and even though Employer was never billed for the rental, and employee was a ‘consumer’, because he acquired the rental by lease. Sherman Simon Enterprises 724 SW2d 13 (Tex. 1987).

Next case, a loan borrower, sues the lender/repossessor, court said DTPA case was OK, because Plaintiff obtained financing from D to purchase the car. Texas collection attorneys pay notice. The car formed the basis of the complaint. 868 SW2d 871 (Texarkana 1993).

Next case, a barge buyer sues the barge builder/financier under DTPA; court says OK, the objective of the financing was the acquisition and purchase of the barge. Ocean Transportation 878 SW2d 271 (Corpus Christi 1994).

Next case, a cattle buyer sues under DTPA, suing the bank that provided the loan for cattle purchase. Court says not OK, b/c the cattle did not form the basis of the complaint. Dallas collection attorneys notice, Court says the bank had no connection to the actual purchase, and P did not allege any deception related to the financing of the transaction. Ford 44 SW3d 121 (Corpus 2001).

Next case, the estate of a garage-door purchaser’s son sued the garage-door seller and manufacturer under DTPA, court says OK, b/c even though P did not contract for the garage door, it was purchased for his benefit, installed in his home, and used by him. Wellborn 970 F. 2d 1420 5ht Cir. 1992.