Gunn Infiniti, Inc. v. O'BYRNE
996 S.W.2d 854, 1999 WL 417294 (1999)
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Rule of Law:
An offer from a defendant to a plaintiff gives rise to a jury question on the affirmative defense of mitigation of damages only if the offer is an unconditional attempt to ameliorate the injury and does not implicitly or explicitly require the plaintiff to release their legal claims. Offers of settlement, which require the claimant to surrender their right to sue, do not trigger a duty to mitigate by acceptance.
Facts:
- Donald O’Byrne sought to purchase a specific 1993 Infiniti G-20 from Gunn Infiniti, Inc.
- A Gunn Infiniti sales representative falsely told O’Byrne, both over the phone and in person, that the car he was interested in was brand new and had never been damaged.
- The representative also falsely stated the car was equipped with an air bag, and a sticker under the hood supported this claim, when in fact the original hood had been replaced and the car did not have an air bag.
- Relying on these misrepresentations, O’Byrne flew from Louisiana to San Antonio and purchased the vehicle.
- One week after the purchase, O’Byrne discovered evidence that the car had been damaged and repainted, and a Gunn Infiniti representative eventually admitted this was true.
- Gunn Infiniti subsequently made several offers to O’Byrne, including a full refund, swapping the car for another, or repainting the car, all of which O’Byrne rejected.
- Months later, O'Byrne attempted to accept the full refund offer, but Gunn Infiniti stated it was no longer available because O'Byrne had put several thousand more miles on the car.
Procedural Posture:
- Donald O’Byrne sued Gunn Infiniti, Inc. in trial court for fraud and violations of the Texas Deceptive Trade Practices-Consumer Protection Act (DTPA).
- At trial, Gunn Infiniti's request for a jury question on mitigation of damages was refused by the court.
- The jury returned a verdict in favor of O’Byrne, awarding actual, mental anguish, and additional damages.
- The trial court rendered judgment for O’Byrne based on the jury's verdict.
- Gunn Infiniti, as appellant, appealed to the court of appeals, which affirmed the trial court's judgment.
- Gunn Infiniti then sought review from the Supreme Court of Texas.
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Issue:
Does a defendant's offer to a plaintiff constitute a valid offer to mitigate damages, thereby entitling the defendant to a jury instruction on mitigation, if accepting the offer would implicitly require the plaintiff to release their legal claims?
Opinions:
Majority - Justice Owen
No. A defendant is not entitled to a jury instruction on mitigation based on its own offer if that offer was one of settlement that implicitly required the plaintiff to relinquish their claims. While the common-law duty to mitigate damages applies in DTPA cases, this duty does not compel a claimant to surrender their right to pursue a legal claim. An offer to mitigate must be unconditional, allowing the claimant to accept it to reduce their losses while still preserving their right to sue for any remaining damages. The court found that Gunn Infiniti's offers, which were repeatedly referred to as attempts to 'settle' the dispute, were implicitly conditioned on O'Byrne releasing his claims. Therefore, they were settlement offers, not mitigation offers, and the trial court correctly refused to submit a mitigation question to the jury. The court also held there was legally insufficient evidence to support the award for mental anguish damages, as O'Byrne's testimony of embarrassment and disappointment did not demonstrate a high degree of mental pain or a substantial disruption to his daily routine.
Dissenting - Justice Baker
Yes. The defendant's offers created a fact question for the jury on whether the plaintiff failed to mitigate his damages, and the trial court erred by refusing to submit the issue. The majority improperly concludes as a matter of law that the offers required a release of claims simply because the parties used the word 'settle'. The term 'settle' is ambiguous and its meaning depends on the context and circumstances, which creates a disputed fact issue for the jury, not a legal issue for the court. Because there was some evidence that O'Byrne could have mitigated his damages by accepting one of Gunn's pre-litigation offers, the issue should have been submitted to the jury to determine if he acted as a reasonably prudent person would have.
Analysis:
This case establishes a critical distinction between an offer of settlement and a true offer to mitigate damages under Texas law. By holding that an offer conditioned on the release of legal claims does not trigger a duty to mitigate, the court protects a plaintiff's right to seek legal redress. The decision prevents defendants from using the mitigation defense as a tool to force claimants into accepting potentially inadequate resolutions to avoid being penalized at trial. This precedent clarifies that mitigation is about minimizing preventable loss, not about forfeiting legal rights, and sets a clear standard for when a defendant's offer can support a mitigation instruction.
