449 S.W.3d 189
Tex. App.2014Background
- In 2008 Johnny Collums purchased a new Ford F-450 that carried a factory warranty, later extended for the fuel system to 200,000 miles.
- In November 2011, while working in North Dakota, Collums experienced mechanical problems; a local Ford dealer (Select Ford Mercury) refused warranty coverage, citing lack of maintenance, and billed the Collums for repairs.
- The truck remained with the Williston dealer for an extended period and was allegedly returned in pieces in 2013.
- In January 2012 the Collums sued Ford and the dealer in Harris County, Texas, alleging violations of the Texas Deceptive Trade Practices Act (DTPA), breach of warranties, and unconscionable conduct; they later nonsuited the dealer.
- Ford moved for summary judgment solely on the ground that the Collums were not "consumers" under the DTPA; the trial court granted summary judgment and ordered the Collums to take nothing.
- On appeal the Fourteenth Court of Appeals considered only whether the Collums satisfied the DTPA’s definition of "consumer." The court reversed and remanded, holding the Collums are consumers as a matter of law.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether plaintiffs are "consumers" under the DTPA | Collums argued they purchased the truck (and its warranty) and the warranty denial and mechanical defects form the basis of their complaint, satisfying the DTPA consumer test | Ford argued the Collums are not Texas "consumers" because the warranty denial occurred in North Dakota and the Collums resided out-of-state, so DTPA does not apply to them | The court held the Collums are "consumers" as a matter of law: purchase of the vehicle/warranty satisfies the DTPA; residency is not required |
Key Cases Cited
- Cameron v. Terrell & Garrett, Inc., 618 S.W.2d 535 (Tex. 1981) (establishes the two-part DTPA consumer test: purchase/lease and that goods/services form the basis of the complaint)
- Riverside Nat’l Bank v. Lewis, 603 S.W.2d 169 (Tex. 1980) (trade/commerce scope does not limit who may maintain a private DTPA action; consumer defined by purchase, not residency)
- Coinmach Corp. v. Aspenwood Apartment Corp., 417 S.W.3d 909 (Tex. 2013) (party’s status as consumer is typically a question of law)
- Lexmark Int’l, Inc. v. Static Control Components, Inc., 134 S. Ct. 1377 (2014) (distinguishes Article III standing from statutory authorization to sue)