Attorney's Fees for Breach of Implied Warranties

Contract Lawyer Austin Texas

Feb 2, 2013 — by jeff
Tags: Contract Law

The general rule in Texas is that a party who prevails in a lawsuit is entitled to recover attorney's fees only if authorized by statute or contract. See Tony Gullo Motors I, L.P. v. Chapa, 212 S.W.3d 299, 310 (Tex. 2006). 

 

[I]n Medical City Dallas, Ltd. v. Carlisle Corporation, 251 S.W.3d 55 (Tex. 2008).... the court determined that a claim for breach of express warranty governed by UCC article 2 is a suit based on a written contract, even though the plaintiff did not plead a breach of contract claim and did not recover on that theory. See id. at 59, 63. The supreme court held that a party who prevails on a breach of express warranty claim may recover attorney's fees under section 38.001(8). See id.

Pursuant to the UCC, "a warranty that the goods shall be merchantable is implied in a contract for their sale if their seller is a merchant with respect to goods of that kind." TEX. BUS. & COM. CODE ANN. § 2.314(a) (Vernon 2009); see also Printing Ctr. of Tex., Inc. v. Supermind Publ'g Co., 669 S.W.2d 779, 784--85 (Tex. App.-Houston [14th Dist.] 1984, no writ.) (regarding implied warranty of merchantability as contractual term in breach of contract case). The Supreme Court of Texas has explained, "An implied warranty is a representation about the implied quality or suitability of a product that the law implies and importsinto a contract." Am. Tobacco Co., Inc. v. Grinnell, 951 S.W.2d 420, 435 (Tex. 1997). In other words, an implied warranty becomes part of the terms of a contract. See Parkway Co. v. Woodruff, 901 S.W.2d 434, 439 (Tex. 1995) (quoting Biddle, A

TREATISE ON THE LAW OF WARRANTIES IN THE SALE OF CHATTELS 1 (Philadelphia, Kay & Brother 1884)); see also Certain--Teed Prods. Corp. v. Bell, 422 S.W.2d 719, 721 (Tex. 1968) (stating that "a warranty which the law implies from the existence of a written contract is as much a part of the writing as the express terms of the contract"); Lee v. Perez, 120 S.W.3d 463, 468 (Tex. App.-Houston [14th Dist.] 2003, no pet.) (explaining that an implied warranty "is part of the contract itself."); W. Tank & Steel Corp. v. Gandy, 385 S.W.2d 406, 409 (Tex. Civ. App.- Texarkana 1964, no writ) ("Warranty, either express or implied, must grow out of contractual relations between the parties."). One court expressly stated that "[t]he implied warranty is contractual in nature." Darr Equip. Co. v. Owens, 408 S.W.2d 566, 569 (Tex. Civ. App.-Texarkana 1966, no writ).

The foregoing case law aside, we recognize that the Supreme Court of Texas has instructed that "[i]mplied warranties are created by operation of law and are grounded more in tort than in contract." JCW Electronics, Inc. v. Garza, 257 S.W.3d 701, 704 (Tex. 2008) (citing La Sara Grain Co. v. First Nat'l Bank, 673 S.W.2d 558, 565 (Tex. 1984) and other earlier decisions for this proposition). The supreme court explained in JCW Electronics that "[c]onceptually, the breach of an implied warranty can either be in contract or in tort depending on the circumstances." Id. The court noted that "[a]s Dean Prosser observed long ago, this area of the law is complicated 'by the peculiar and uncertain nature and character of warranty, a freak hybrid born of the illicit intercourse of tort and contract.'" Id. at 704--05 (citing William L. Prosser, THE ASSAULT UPON THE

CITADEL (STRICT LIABILITY TO THE CONSUMER), 69 Yale L.J. 1099, 1126 (1960)).

In JCW Electronics the supreme court explained that "[t]he precise nature of the claim is ordinarily identified by examining the damages alleged: when the damages are purely economic, the claim sounds in contract, but a breach of implied warranty claim alleging damages for death or personal injury sounds in tort." Id. at 705 (citations omitted). As mentioned, the supreme court in Medical City and in 1/2 Price Checks also discussed the importance of the type of damages sought in determining whether a plaintiff's claim is based in contract and thus supports recovery of attorney's fees under section 38.001(8). See 1/2 Price Checks, 344 S.W. at 388; Medical City, 251 S.W.3d at 60--61.

 

Howard Industries Inc. v. Crown Cork & Seal LLC (Tex. App. - Houston [1st Dist.] - 2013)

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