Kennemore v. Bennett
31 Tex. Sup. Ct. J. 623, 755 S.W.2d 89, 1988 Tex. LEXIS 95 (1988)
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Rule of Law:
A consumer's acceptance of and payment for allegedly defective goods or services does not, by itself, constitute a waiver of claims under the Texas Deceptive Trade Practices-Consumer Protection Act (DTPA). Common law contract defenses like waiver and estoppel are not automatically controlling in a statutory DTPA action.
Facts:
- Thomas and Charla Kennemore entered into a contract with builder Bill Bennett for the construction of a new home on their property.
- During construction, the Kennemores observed numerous defects and variances from the original plans, which they repeatedly brought to Bennett's attention.
- Bennett gave the Kennemores continued reassurances that he would instruct his subcontractors to correct the problems, but the defects were never fixed.
- Upon the home's completion, the Kennemores moved in and changed the exterior locks.
- A dispute arose over the final payment due to the alleged defects and charges for 'extras', leading the Kennemores to initially refuse to close the transaction.
- After Bennett initiated legal action against them, the Kennemores paid the full contract price plus the disputed 'extras' demanded by Bennett.
Procedural Posture:
- Builder Bill Bennett sued homeowners Thomas and Charla Kennemore in a Texas trial court, seeking injunctive relief and foreclosure of a mechanic's lien.
- The Kennemores filed a counterclaim against Bennett, alleging violations of the Deceptive Trade Practices-Consumer Protection Act (DTPA).
- After the Kennemores paid Bennett the full amount demanded, his original claims were extinguished, and the case proceeded to trial solely on the Kennemores' DTPA counterclaim.
- At the close of the Kennemores' evidence, the trial court granted Bennett's motion for a directed verdict, entering a take-nothing judgment against the Kennemores.
- The Kennemores, as appellants, appealed to the Texas Court of Appeals, which affirmed the trial court's judgment.
- The Kennemores then appealed to the Supreme Court of Texas for review.
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Issue:
Does a consumer's acceptance of and payment for allegedly defective performance constitute a waiver of their claims under the Texas Deceptive Trade Practices-Consumer Protection Act (DTPA), thereby estopping them from bringing suit?
Opinions:
Majority - Mauzy, J.
No. A consumer does not waive claims under the Deceptive Trade Practices-Consumer Protection Act (DTPA) merely by accepting and paying for an allegedly defective performance. The court reasoned that traditional common law contract theories, such as waiver and estoppel, are not controlling in a statutory DTPA action. The DTPA creates remedies for consumers that are independent of contract law, and nothing in the statute's language or policy requires consumers to withhold performance (payment) to preserve their right to sue. To hold otherwise would discourage the resolution of disputes. Therefore, in the absence of an express settlement or an explicit waiver, the Kennemores retained their right to pursue their DTPA claims for breach of implied warranty, misrepresentation, and unconscionable conduct.
Analysis:
This decision significantly strengthens the Texas Deceptive Trade Practices-Consumer Protection Act by separating it from traditional common law contract defenses. It establishes that a consumer's statutory rights under the DTPA are not automatically forfeited by actions that might constitute waiver or estoppel in a simple breach of contract case. The ruling protects consumers by allowing them to mitigate damages or resolve immediate threats (like foreclosure) by rendering payment, without sacrificing their ability to later seek redress for deceptive practices or substandard work. This precedent forces lower courts to analyze DTPA claims on their statutory merits rather than dismissing them based on common law defenses that are inconsistent with the Act's consumer protection goals.
