5.3 DTPA Notice, Settlement, Damages, and Defenses

5.3 DTPA Notice, Settlement, Damages, and Defenses

Sequence: 60-day notice → possible inspection and response → mediation or settlement offer → litigation and mental-state findings.

Pre-Suit Notice

Section 17.505 generally requires written notice at least 60 days before filing a suit for DTPA damages. The notice states in reasonable detail:

• the specific complaint;
• economic damages claimed;
• mental-anguish damages claimed; and
• expenses, including attorney fees, reasonably incurred.

During the period, the prospective defendant may make a reasonable written request to inspect the goods.

Notice is excused when the need to file to prevent limitations expiration makes it impracticable or when the claim is asserted as a counterclaim. Otherwise, a defendant timely files the statutory plea in abatement. The result is abatement until 60 days after compliant notice—not automatic dismissal with prejudice.

Settlement Offers

Section 17.5052 permits a settlement offer in specified windows. The offer separately states:

1. money or consideration for the consumer's damages claim; and
2. money for reasonable and necessary attorney fees incurred as of the offer.

The consumer has 30 days to accept both parts. If the damages offer is the same as, substantially the same as, or more than the factfinder's damages, recovery is capped at the lesser of the offer or damages found. The court determines pre-offer fees; a sufficient fee offer can cap fees at the offered amount.

The cap does not apply if the offering party could not perform or substantially misrepresented the offer's cash value. An offer is not an admission.

Damages

A prevailing consumer ordinarily recovers economic damages. If conduct was knowing, the consumer may recover proven mental anguish and the factfinder may award up to three times economic damages.

If conduct was intentional, the consumer may recover proven mental anguish and the factfinder may award up to three times the amount of mental-anguish and economic damages.

“Up to” matters. Trebling is not automatic, and attorney fees are not included in the multiplier.

The court can also grant injunctions, restoration of money or property, and other proper relief within the statute.

Attorney Fees

Section 17.50(d) says each prevailing consumer shall receive court costs and reasonable and necessary attorney fees.

Under § 17.50(c), when the court finds the action groundless in fact or law, brought in bad faith, or brought for harassment, it shall award the defendant reasonable and necessary attorney fees and court costs. It is inaccurate to describe that finding as merely allowing a discretionary fee.

Written-Information Defense

Section 17.506 can defend against damages and fees when, before consummation, the defendant gave reasonable and timely written notice that the defendant relied on specified written information from government records, another source, or a government-required test; the information was false; and the defendant did not know and could not reasonably have known of the falsity.

The defendant must prove the written information was a producing cause of the alleged damage. Other unprotected conduct that also caused damage can preserve recovery. Quietly attributing a statement after the sale does not satisfy the advance-notice defense.

A full tender within 30 days after receiving the consumer's notice can also create the statutory defense described in § 17.506(d).

Mediation

A party may move to compel mediation no later than the 90th day after service of a pleading seeking DTPA relief. The statute provides scheduling deadlines. If claimed economic damages are under $15,000, a party may compel mediation only by agreeing to pay the mediation costs.

That is more precise than saying every case over or under $15,000 automatically mediates.

“As Is”

A valid “as is” agreement can negate producing cause in appropriate circumstances. Fraudulent inducement, concealment, bargaining facts, and interference with inspection can change the result. Never treat the clause as permission to misdescribe goods.

Example

A buyer gives a detailed 60-day letter claiming $20,000 economic loss and $3,000 fees. The auction company inspects and offers $20,000 plus $3,000 in separate components. If rejected and the factfinder later awards no more, § 17.5052 can cap damages and fees. The offer still is not an admission.

Exam Rule

Notice first; separate the two offer components; tie enhanced damages to knowing or intentional findings; apply fee rules exactly.