Roy Dale Leifester v. Dodge Country, Ltd. and DaimlerChrysler Corporation ( 2007 )

TEXAS COURT OF APPEALS, THIRD DISTRICT, AT AUSTIN
NO. 03-06-00044-CV
Roy Dale Leifester, Appellant
v.
Dodge Country, Ltd. and DaimlerChrysler Corporation, Appellees
FROM THE DISTRICT COURT OF BELL COUNTY, 146TH JUDICIAL DISTRICT
NO. 205,428-B, HONORABLE RICK MORRIS, JUDGE PRESIDING
MEMORANDUM OPINION
Roy Dale Leifester appeals from “no evidence” summary judgments foreclosing his
claims against Dodge Country, Ltd. and Daimler Chrysler Corporation. See Tex. R. Civ. P. 166a(I).
We will affirm.
BACKGROUND
On or about June 25, 2002, Leifester purchased a new Dodge Ram 2500 Quad truck
from Dodge Country in Killeen. Daimler Chrysler represents that it had “assembled” the truck. To
greatly simplify the underlying factual allegations, in December 2003 the truck’s front-end
differential locked-up or “froze,” Leifester requested repairs, and a dispute arose concerning whether
such repairs would be covered under Daimler Chrysler’s seven-year “Powertrain Pledge Limited
Warranty.” The powertrain warranty provided:
For You, the original purchaser of the vehicle only, the warranty will pay the total
cost (parts and labor) less a $100 deductible per visit, to correct a mechanical failure
caused by a defect in materials or workmanship of a “covered component” for 7 years
after the factory warranty start date or until the vehicle odometer reads 100,000 miles,
whichever occurs first.
The defendants, maintaining that the truck’s problems were caused by a frontal collision or
Leifester’s abuse of the truck rather than “a defect in materials or workmanship,” refused to pay for
repairs under the warranty.
Leifester sued, asserting claims for common-law fraud, breach of contract,
unconscionable action or course of action under the Deceptive Trade Practices Act (DTPA), and
breach of warranties under the DTPA (express warranty and implied warranties of fitness for a
particular purpose, good and workmanlike performance, and merchantability). Leifester sought as
damages out-of-pocket expenses (including $32,451.99, representing the truck’s purchase price and
payments toward purchase), loss of use, lost profits, loss of credit, finance charges, “[l]oss of the
‘benefit of the bargain,’” diminished market value, cost of repairs, and cost of completion, attorney’s
fees, and mental anguish and additional damages under the DTPA. Leifester also sought rescission
of the contract under section 17.50(b)(3) of the DTPA and a declaratory judgment “[t]hat Plaintiff
properly revoked his acceptance of the vehicle, and is entitled to a full refund of the
purchase price of the vehicle.”
After discovery, both defendants filed virtually identical no-evidence summary
judgment motions. A chief contention was that Leifester could not prove elements of his claims
predicated upon pre-sale communications or their effect because he had admitted in deposition that
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he had decided independently to purchase a Dodge Ram 2500 Quad truck, ascertained that the
dealership had one available, and proceeded to purchase it without relying on any representations
or marketing materials from the defendants. The defendants also challenged elements predicated
upon the existence of a mechanical defect in the truck for which they, rather than Leifester, were
responsible. Leifester filed a single response to both motions.1 He did not attempt to adduce
evidence concerning pre-sale events but attempted to raise fact issues regarding the nature and origin
of the truck’s differential problems. The district court granted each motion in its entirety, ordering
Leifester to take nothing on his claims. This appeal followed.
DISCUSSION
Leifester brings three issues on appeal. In the first, he asserts that the district court
erred in granting summary judgment as to each defendant regarding unconscionability under the
DTPA, rescission under the DTPA, and “revocation of acceptance under [U.C.C.] section 2.608”
because the defendants’ motions did not adequately place these matters at issue. In his second and
third issues, Leifester contends that the summary judgment evidence raises fact issues on,
respectively, his claims for breach of the express warranty and breach of the implied warranty of
merchantability.2
1
He conceded that “their motions are identical.”
2
Leifester appears to assume that his issues apply identically to each defendant, and we will
do the same.
3
Leifester explicitly “abandons the claims made under section 17.50(a)(1) Texas
Business and Commerce Code, for fraud, breach of contract, breach of implied warranties of fitness
for a particular purpose, and of good and workmanlike performance.”
Standard of review
A no-evidence summary judgment is essentially a pretrial directed verdict; thus, we
apply the same legal sufficiency standard in reviewing the no-evidence summary judgment as we
apply in reviewing a directed verdict. King Ranch, Inc. v. Chapman, 118 S.W.3d 742, 750 (Tex.
2003); Liberty Mut. Ins. Co. v. Texas Dep’t of Ins., 187 S.W.3d 808, 819 (Tex. App.—Austin 2006,
pet. denied); Jackson v. Fiesta Mart, Inc., 979 S.W.2d 68, 70 (Tex. App.—Austin 1998, no pet.).
A no-evidence summary judgment is improperly granted if the non-movant presents more than a
scintilla of probative evidence to raise a genuine issue of material fact. See Fort Worth Osteopathic
Hosp., Inc. v. Reese, 148 S.W.3d 94, 99 (Tex. 2004); Cantu v. Texas Workforce Comm’n, 145
S.W.3d 236, 239 (Tex. App.—Austin 2004, no pet.). A no-evidence issue will be sustained when
(a) there is a complete absence of evidence of a vital fact, (b) the court is barred by rules of law or
of evidence from giving weight to the only evidence offered to prove a vital fact, (c) the evidence
offered to prove a vital fact is no more than a mere scintilla, or (d) the evidence conclusively
establishes the opposite of the vital fact. Merrell Dow Pharms. v. Havner, 953 S.W.2d 706, 711
(Tex. 1997). More than a scintilla of evidence exists if it would allow reasonable and fair-minded
people to differ in their conclusions. Forbes, Inc. v. Granada Biosciences, Inc., 124 S.W.3d 167,
172 (Tex. 2003).
4
Scope and specificity of summary judgment motions
To obtain no-evidence summary judgment on a claim, the defendants were required
to “state the elements as to which there is no evidence.” See Tex. R. Civ. P. 166a(i) & cmt. (“The
motion must be specific in challenging the evidentiary support for an element of a claim or defense;
paragraph (i) does not authorize conclusory motions or general no-evidence challenges to an
opponent’s case.”). In addition, the district court could not grant summary judgment on grounds not
expressly raised in defendants’ summary judgment motions, see, e.g., Johnson v. Brewer &
Pritchard, P.C., 73 S.W.3d 193, 204 (Tex. 2002); Chessher v. Southwestern Bell Tel. Co., 658
S.W.2d 563, 564 (Tex. 1983); Trilogy Software, Inc. v. Callidus Software, Inc., 143 S.W.3d 452, 469
n.15 (Tex. App.—Austin 2004, pet. filed), and Leifester would have had no obligation to present
evidence regarding claims not specifically challenged. See McConnell v. Southside Indep. Sch. Dist.,
858 S.W.2d 337, 342 (Tex. 1993). Leifester contends that the defendants’ motions failed to
specify the elements of his DTPA unconscionability claim for which they asserted that no
evidence existed and wholly failed to challenge his “claims” for rescission and revocation of
acceptance. We disagree.
Unconscionability
To recover on his unconscionability claim, Leifester had to prove (1) an
“unconscionable action or course of action” that violated the DTPA; (2) that was a producing cause
of actual damages. See Tex. Bus. & Com. Code Ann. § 17.50(a)(3) (West Supp. 2006); Latham v.
Castillo, 972 S.W.2d 66, 68-69 (Tex. 1998). “Unconscionable action or course of action” is defined
as “an act or practice which, to a consumer’s detriment, takes advantage of the lack of knowledge,
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ability, experience, or capacity of a person to a grossly unfair degree.” Tex. Bus. & Com. Code Ann.
§ 17.45(5) (West 2002).
In their summary judgment motions, the defendants specifically challenged the
evidence supporting the “unconscionable action or course of action” element of Leifester’s
unconscionability claim: “the Plaintiff has failed to produce any evidence that [defendant] engaged
in an unconscionable act or course of action.” Id. § 17.50(a)(3). The defendants then elaborated on,
with regard to all of Leifester’s DTPA claims, Leifester’s admissions that he had not relied on any
representations or marketing materials in his decision to purchase the truck but “knew exactly which
vehicle he wanted before he arrived at Dodge Country’s lot.” We hold that the defendants
adequately stated the elements of Leifester’s DTPA unconscionability claim as to which they claim
there is no evidence. See Tex. R. Civ. P. 166a(i); see also Latham, 972 S.W.2d at 68-69 (Tex.
1998).3
3
We also note that Leifester did not raise this complaint in the district court. We have
previously held, in an unpublished opinion, that an exception or objection in the trial court is
required to preserve error on a complaint that a no-evidence summary judgment motion fails to
comply with the specificity requirement of rule 166a(i). See Barnes v. Sulak, No. 03-01-00159-CV,
2002 Tex. App. LEXIS 5727, at *26 n.4 (Tex. App.—Austin Aug. 8, 2002, pet. denied) (not
designated for publication) (citing Walton v. Phillips Petroleum Co., 65 S.W.3d 262, 268 (Tex.
App.—El Paso 2001, pet. denied); Williams v. Bank One, Tex., N.A., 15 S.W.3d 110, 117 (Tex.
App.—Waco 1999, no pet.); Roth v. FFP Operating Partners, L.P., 994 S.W.2d 190, 194-95 (Tex.
App.—Amarillo 1999, pet. denied)); see also Sanders v. Capitol Area Council, BSA, 930 S.W.2d
905, 910 (Tex. App.—Austin 1996, no writ) (holding that, as a general rule, a non-movant “must
except to the lack of specificity or waive the error” but also holding that a non-movant “does not
have a duty to except to a ground not presented in the motion but which the movant might have
relied on as a ground for summary judgment”). There is a split of authority on this issue, with
several courts holding that a non-movant may raise a defect in a no-evidence motion—including a
failure to specify the elements being challenged—for the first time on appeal. See, e.g., In re Estate
of Swanson, 130 S.W.3d 144, 147 (Tex. App.—El Paso 2003, no pet.); Cuyler v. Minns, 60 S.W.3d
209, 212-14 (Tex. App.—Houston [14th Dist.] 2001, pet. denied); Callaghan Ranch, Ltd. v. Killam,
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Rescission and revocation of acceptance
The defendants’ motions do not mention Leifester’s “claims” for rescission or
revocation of acceptance. Defendants urge that they were not required to explicitly address
rescission or revocation of acceptance in their motions because they are not independent claims but
only remedies for Leifester’s claims. We agree with defendants that they were not required to
explicitly address rescission or revocation of acceptance in their motions in order to obtain summary
judgment on Leifester’s claims.
Leifester pleaded for rescission “[p]ursuant to Section 17.50(b)(3) of the Texas
Business and Commerce Code.” Rescission is one of the remedies available under a DTPA claim,
not an independent cause of action. Compare Tex. Bus. & Com. Code Ann. § 17.50(a) (claims that
can be maintained under the DTPA), with id. § 17.50(b) (relief, including rescission, is available to
consumers who prevail in an action under that section). To obtain no-evidence summary judgment
on Leifester’s DTPA claims, rule 166a(i) required defendants only to specify “one or more essential
elements of a claim” for which there is no evidence. It did not require defendants to specifically
attack each remedy Leifester sought in the event he prevailed on his claims (e.g., rescission or money
damages). Alternatively, any error in this regard would be harmless because any defect in
defendants’ motions regarding a mere remedy could not defeat their summary judgment entitlement
if, as the district court found, there was no evidence to support one or more essential elements of
Leifester’s causes of action.
53 S.W.3d 1, 3 (Tex. App.—San Antonio 2000, pet. denied). We need not address this question
here.
7
Similarly, while Texas courts sometimes make shorthand references to a “claim” for
“revocation of acceptance,”4 it is, at least under Leifester’s pleadings, merely a component of
Leifester’s breach-of-contract claim. Section 2.608 of the U.C.C. provides that a buyer may:
revoke his acceptance of a lot or commercial unit whose non-conformity substantially
impairs its value to him if he has accepted it
(1) on the reasonable assumption that its non-conformity would be cured and
it has not been seasonably cured; or
(2) without discovery of such non-conformity if his acceptance was
reasonably induced either by the difficulty of discovery before acceptance or
by the seller’s assurances.
Id. § 2.608(a) (West 1994).5 “Non-conformity” is defined in terms of the contract of sale: goods are
“‘conforming’ or conform to the contract when they are in accordance with the obligations under the
contract.” Id. § 2.106(b) (West 1994). Whether a buyer has the right to revoke his acceptance
impacts the kinds of damages he may recover for breach when goods are non-conforming. A buyer
who rightfully rejects goods before acceptance or justifiably revokes his acceptance may recover
breach-of-contract remedies for delivery of non-conforming goods under section 2.711 of the U.C.C.,
including recovery of the purchase price and damages for non-delivery. Id. § 2.711(a) (West 1994).
4
See, e.g., Satre v. Dommert, 184 S.W.3d 893, 900 (Tex. App.—Beaumont 2006, no pet.);
Ford Motor Co. v. Cooper, 125 S.W.3d 794, 800 (Tex. App.—Texarkana 2004, no pet.); Neal v.
SMC Corp., 99 S.W.3d 813, 815 (Tex. App.—Dallas 2003, no pet.); Neily v. Aaron, 724 S.W.2d
908, 910 (Tex. App.—Fort Worth 1987, no writ).
5
Such revocation “must occur within a reasonable time after the buyer discovers or should
have discovered the ground for it and before any substantial change in the condition of the goods
which is not caused by their own defects” and “is not effective until the buyer notifies the seller of
it.” Tex. Bus. & Com. Code Ann. § 2.608(b) (West 1994). “A buyer who so revokes has the same
rights and duties with regard to the goods involved as if he had rejected them.” Id. § 2.608(c).
8
By contrast, if the buyer has accepted the goods, he may recover breach of warranty damages
generally measured by the difference, at the time and place of acceptance, between the value of the
goods accepted and the value they would have had if they had been as warranted, plus incidental and
consequential damages. Id. § 2.714 (West 2002); see also Southwestern Bell Tel. Co. v. FDP Corp.,
811 S.W.2d 572, 576 (Tex. 1991) (explaining that remedies for breach of warranty are only available
after buyer has finally accepted goods); Emerson Elec. Co. v. American Permanent Ware Co., 201
S.W.3d 301, 310 (Tex. App.—Dallas 2006, no pet.) (“A buyer who rightfully rejects the goods or
justifiably revokes his acceptance may recover breach of contract remedies for delivery of
non-conforming goods under section 2.711.”); Selectouch Corp. v. Perfect Starch, Inc., 111 S.W.3d
830, 834 (Tex. App.—Dallas 2003, no pet.) (“[T]he critical factor in whether the buyer has a breach
of contract or a breach of warranty claim is whether the buyer has finally accepted the goods.”);
Materials Mktg. Corp. v. Spencer, 40 S.W.3d 172, 174 (Tex. App.—Texarkana 2001, no pet.) (“A
buyer’s sole recovery after acceptance is for breach of warranty.”).
In his petition, Leifester pleaded for a declaratory judgment that “Plaintiff properly
revoked his acceptance of the vehicle, and is entitled to a full refund on the purchase price of the
vehicle.” See Tex. Civ. Prac. & Rem. Code Ann. § 37.004 (West 1997). Read in context, this
“revocation of acceptance” allegation concerns a mere component of Leifester’s breach-of-contract
claim and the damages recoverable under it. Emerson Elec. Co., 201 S.W.3d at 310 (revocation of
acceptance issue “was not an independent ground of recovery; it was a component of [the] breach
of contract claim and necessarily referable to it.”); see also Cooper v. Lyon Fin. Servs., 65 S.W.3d
197, 205 (Tex. App.—Houston [14th Dist.] 2001, no pet.) (revocation of acceptance is defense to
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breach-of-contract claim). Leifester has waived his breach of contract claim. To the extent
Leifester’s revocation of acceptance pleading might relate to his remaining warranty claims, the
defendants have challenged other elements of Leifester’s breach of warranty claims that provide
independent grounds to support summary judgment.
We overrule Leifester’s first issue.
Summary judgment evidence
In his second and third issues, Leifester contends that he brought forth more than a
scintilla of probative evidence raising genuine issues of material fact that defendants breached the
express powertrain warranty and the implied warranty of merchantability.
To prevail on his breach of express warranty claim, Leifester was required to prove
that the powertrain warranty covered repair of the truck’s differential problems, which required proof
that (1) the truck had “a defect in materials or workmanship” that (2) caused the “mechanical failure”
in question. To demonstrate that he met this burden, Leifester points to his own affidavit and that
of Danny Dunn, the owner of a Killeen transmission repair shop. In relevant part, Leifester testified
that “Dodge Country claimed it [the truck] had hit a rock and I had abused it, even before anyone
looked at it,” and that “I never abused the truck, and it was never hit by a rock.” Dunn testified that
he possessed 20 years’ experience “repairing automobile and truck transmissions and drive-trains”
and that “I am familiar with Dodge power-trains and have repaired them on many occasions.”
Regarding the cause of Leifester’s differential problems, he explained:
I examined the front differential of Roy Dale Leifester’s 2002 Dodge Ram 2500
pickup truck. It did not have any outer damage to the cover or housing. It is my
10
opinion that vibration caused the front pinion seal to fail, leaking out lubricant which
in turn caused the front pinion bearing to fail, causing major damage to the internal
parts. I did not see any damage to the under side of the truck that would indicate the
vehicle had been wrecked or abused.
Neither witness identified a “defect in material or workmanship” in the truck, much
less explained how such a defect caused the differential problems Leifester experienced. Dunn does
posit that the problems were caused by a chain reaction—“vibration” occurred, causing a pinion seal
to leak, causing the front pinion to fail, etc.—but does not explain whether or how any of these
events were caused by a product defect. See Cooper Tire & Rubber Co. v. Mendez, 204 S.W.3d 797,
807 (Tex. 2006) (“Texas law does not generally recognize a product failure standing alone as proof
of a product defect.”); see also McIntyre v. Ramirez, 109 S.W.3d 741, 749 (Tex. 2003); Wadewitz
v. Montgomery, 951 S.W.2d 464, 466 (Tex. 1997). We overrule Leifester’s second issue.
The absence of evidence of a defect is likewise fatal to Leifester’s claim for breach
of the implied warranty of merchantability. That claim is based on U.C.C. section 2.314, which
provides that a seller of goods impliedly warrants that they “are fit for the ordinary purposes for
which such goods are used.” Tex. Bus. & Com. Code Ann. § 2.314(b)(3) (West 1994). For goods
to breach the implied warranty of merchantability, they must be defective—that is, they must be
“unfit for the ordinary purposes for which they are used because of a lack of something necessary
for adequacy.” GMC v. Brewer, 966 S.W.2d 56, 57 (Tex. 1998) (quoting Plas-Tex, Inc. v. U.S. Steel
Corp., 772 S.W.2d 442, 443-44 (Tex. 1989)); Polaris Indus. v. McDonald, 119 S.W.3d 331, 336
(Tex. App.—Tyler 2003, no pet.). Furthermore, the goods must have been defective at the time they
left the manufacturer’s or seller’s possession. Plas-Tex, Inc., 772 S.W.2d at 444; Chandler v. Gene
11
Messer Ford, Inc., 81 S.W.3d 493, 502 (Tex. App.—Eastland 2002, pet. denied); Hyundai Motor
Co. v. Chandler, 882 S.W.2d 606, 613 (Tex. App.—Corpus Christi 1994, writ denied). Because
Leifester has failed to raise a fact issue regarding the existence of a defect, the district court did not
err in granting summary judgment as to this claim.6 We overrule Leifester’s third issue.
CONCLUSION
Having overruled Leifester’s issues on appeal, we affirm the judgment of the
district court.
__________________________________________
Bob Pemberton, Justice
Before Justices Puryear, Pemberton and Waldrop
Affirmed
Filed: February 1, 2007
6
Leifester devotes most of his briefing on this issue to whether the implied warranty of
merchantability had been excluded or modified by the express warranty. However, defendants did
not assert this as a no-evidence summary judgment ground but indicated only that they would assert
it, if necessary, in a subsequent traditional motion.
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