What is a DTPA claim?
DTPA stands for Texas Deceptive Trade Practice Act (the “Act”), which was codified in Chapter 17 of the Texas Business and Commerce Code. This act was codified in order to “protect consumers against false, misleading, and deceptive business practices, unconscionable actions, and breach of warranty, and to provide efficient and economical procedures to secure that protection.” The Texas DTPA statute allows a consumer to file suit against “any person whose false, misleading, or deceptive acts, or other practices cause the consumer’s harm. As a prerequisite to filing, a consumer must give written notice to the person against whom the consumer is claiming deceptive acts at least 60 days prior to filing suit advising the person in reasonable detail of the specific complaint and amount of damages, including attorneys fees reasonably incurred.
What is a consumer?
Under the DTPA, a plaintiff must qualify as a consumer to bring a claim. “A consumer is an individual, partnership, corporation, the state of Texas, or a subdivision or agency of the state of Texas, who seeks or acquires by purchase or lease any goods or services.” In order for a consumer to establish themselves as such, they must show (1) that they sought or acquired goods or services by purchase or lease, and (2) that the goods or services form the basis of the DTPA complaint.
The Laundry List
Texas Business and Commerce Code lays out a “laundry list” of examples that constitute “false, misleading, or deceptive acts or practices” that are violations of the Act. Thirty-four items are included in this non-exclusive laundry list. For reference as examples, the first five items on that list are:
(1) passing off goods or services as those of another;
(2) causing confusion or misunderstanding as to the source, sponsorship, approval, or certification of goods or services;
(3) causing confusion or misunderstanding as to affiliation, connection, or association with, or certification by, another;
(4) using deceptive representations or designations of geographic origin in connection with goods or services;
(5) representing that goods or services have sponsorship, approval, characteristics, ingredients, uses, benefits, or quantities which they do not have or that a person has a sponsorship, approval, status, affiliation, or connection which the person does not;
DTPA Claims Under Other Statutes
According to Dorsaneo, Texas Litigation Guide, “the number of statutes that provide that their violation, or a violation of some of their provisions, constitutes a deceptive trade practice is constantly growing.” One need not only bring a DTPA claim under the DTPA statute. Violations of other statutes may give rise to claims under the DTPA statute, however a plaintiff may not recover actual damages and penalties under the DTPA as well as damages under another statute for the same acts. This makes sense, as plaintiffs should not be allowed to “double-dip” their claims.
If you believe you may have a claim under the Deceptive Trade Practices Act, please contact us to schedule a consultation with an attorney.
Nacol Law Firm P.C.
Dallas Litigation Attorneys
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Disclaimer: The information provided in this article is in no way intended to constitute legal advice. The information provided is merely an overview of the relevant law. Do not act on this information. Always consult an attorney for legal advice.
Going Into Business in Texas – Picking a Business Model
There are many business structures an entrepreneur may employ in forming his business. Each structure is somewhat different and choosing a specific business model depends on each entrepreneur’s specific needs. Below are 6 important business vehicles that any entrepreneur should explore before making their final decision to start their business.
- The Sole Proprietorship: This business structure is the most simple. The business is comprised of a single individual. There is no legal separation from the entrepreneur and his business. The proprietorship and the entrepreneur are taxed as one entity. The entrepreneur reports all income and deductible expenses for the proprietorship on his personal income tax. There is no personal protection from liability for the owner with this business structure. The entrepreneur is personally liable for anything that happens with his business and receives no protection.
- The Corporation: This business structure is more complex and offers more protection. The corporation is a separate legal entity that is created and must be recognized by the state. The corporation, unlike the sole proprietorship, gives the entrepreneur significant liability protection. The corporation itself can be sued, but the shareholder is protected. Usually small beginning entrepreneurs will create a “closely held” corporation in which all shares are owned by the entrepreneur and no stock is publicly sold. The price or this liability protection is that the corporation must pay a tax. A tax is paid on the earnings of the corporation and there is a second tax on the dividends paid to the shareholders. This is commonly referred to as the “double tax measure.” If the entrepreneur wants the benefit of liability protection, he may have to address double taxes if deciding upon a corporation, or assume all income is disposed of as salary.
- The General Partnership: This business structure is similar to the sole proprietorship, but consisting of multiple people or entities. No formal agreement is necessary, but is strongly recommended. The partnership agreement will control and describe the powers and limits of each partner. Just like the sole proprietorship, there is no personal liability protection. All partners are jointly and severally liable. This means that if the partnership acts negligently, one or all of the partners will be vulnerable to being sued. The partnership does not pay a tax. Each partner will be taxed on a personal level equal to the share that the partner owns unless the partnership agreement states otherwise. However, Texas does subject general partnerships to a franchise tax.
- The Limited Partnership: This business structure is a combination of both a general partnership and a corporation. There must be at least one general partner. The general partner will assume personal liability for the partnership, but is the only partner with most management and control of the partnership. The limited partners have no personal liability to the partnership, but are prohibited from participating in management of the partnership. The partners will be taxed on a personal level equal to the share that the partner owns as well as a franchise tax. A certificate of formation must be filed with the Secretary of State in Texas.
- The Limited Liability Partnership (LLP): This is similar to the limited partnership, but the limited partners may participate in management. At least one general partner must still be personally liable for the partnership. This is a common business structure for law firms and accounting firms. The LLP is still subject to the Texas franchise tax and the proper paperwork must be filled with the Secretary of State.
- Limited Liability Company (LLC): This business structure is another combination between a corporation and a partnership. This business structure is the most common for starting entrepreneurs because an individual may guard against personal liability as well as double taxation. The individuals that comprise the LLC pay taxes individually, similar to a partnership. All members of the LLC are allowed to participate in management and decision making. An operation agreement must be formed similar to a partnership agreement that structures how the LLC will be run. An entrepreneur must fill out the necessary paperwork and submit it to the Secretary of State in Texas to properly form an LLC. The LLC is also subject to a franchise tax in Texas.
All of these business structures have both vulnerabilities and merits. It is important to sit down with an experienced attorney and discuss your options before choosing a specific type of business formation. This is the most basic and important decision an original entrepreneur must address and he/she should be aided by a lawyer with experience in the matters and decision making.
Texas Condominium HOA’s and Foreclosure
A Texas condominium HOA ( Home Owner Association ) has more power than a Texas residential HOA to foreclosure on a unit. Foreclosure is a constant source of anxiety for many condominium owners that may have exiting outstanding assessment fees. If you are a condominium owner be sure to pay timely your HOA assessment fees.
An HOA may foreclose on your condominium judicially or non-judicially through a deed of trust. Read your Texas HOA By-laws carefully. The By-laws will state what power the HOA has and the notices required before the foreclosure process may be implemented. A few key things to keep in mind regarding Condominium HOA Foreclosures are:
- A Condominium HOA may foreclose if you have outstanding assessment fees;
- A Condominium HOA may not foreclose if the debt you owe is solely based on HOA fines;
- The HOA Bylaws will dictate to whether the association can foreclose on your property judicially or non-judicially;
- After a foreclosure, you will have 90-days to redeem your property from the HOA or a third-party buyer;
- The HOA must send you notice of default for any outstanding assessment fees prior to foreclosure;
If a HOA files for a judicial foreclosure on your condominium, which is utilized as a residence, then you must be given two separate notices per Texas Property Code § 52.001. First a notice of default, which gives you 20-days to cure any outstanding debt. After the notice of default, a notice of sale must be sent 21-days prior to the foreclosure sale. Both notices are mandatory for a judicial foreclosure sale.
If the notices are not properly given or if the HOA wrongfully forecloses on your condominium there is recourse. A wrongful foreclosure cause of action if successful will entitle you to monetary damages but it will be an uphill battle to regain the property if the property is sold and the 90-day redemption period has expired. It is important to know that if a foreclosure has taken place, even if wrongful, it will be difficult to recover the property, especially if a third party purchases the unit, and takes title at the foreclosure sale. It is important to realize that suing an HOA involves inherent risks. Many HOAs are not solvent and obtaining a money judgment against the association may be worthless if the HOA has no property or other assets subject to execution.
The wisest course of action is to contact a lawyer as soon as possible if you have been subjected to a wrongful foreclosure proceeding. It is far easier to stop a foreclosure during the process than it is to regain title to your property after it has been sold.
Julian Nacol, Attorney
Nacol Law Firm P.C.
Civil Litigation and The Road to Trial
Dallas Texas Board Certified Attorney, Mark A. Nacol, talks about
Civil Litigation and the process leading up to a Civil Trial.
Home Owner Associations ( HOA ) : Are You in For Problems?
Everyone loves and hates their HOA. A HOA has the power to make every neighbor’s’ life a little easier by establishing restrictions that keep the neighborhood clean, safe, and accountable.
HOA’s also in some cases have been given power to make an individual homeowner’s life unhappy. Depending on the circumstances, a HOA in a neighborhood of homes may not have the same specific powers as a HOA in a condominium or townhouse setting. Regardless whether you are an owner of a home, condominium, or townhouse and you have been wronged by your HOA, here is a list of things you must do:
- Read the HOA by-laws CAREFULLY!!
- Keep all documentation of correspondence you have had with the Board, the Executive Officers, and Management Co., if there is one.
- Prepare a demand letter citing the specific by-laws that support your position.
- Record the HOA meetings in which your issues are presented or addressed and request minutes of the meeting from the secretary.
- Do not delay hiring an attorney if the HOA is not responsive to your grievances.
Certain issues, depending on the by-laws, such as unjustified forced foreclosures, failure to repair plumbing or foundations, trying to force you to construct or build a fence on your separate property are worth seeking legal advice. An experienced attorney is needed if you are to take on a Texas Home Owner’s Association. Many by-laws are open to interpretation regarding what a Texas HOA must repair and what is not responsible for under the HOA by-laws. To battle a strong HOA organization it takes an experienced real estate lawyer and if you have been a victim of HOA oppression seek an experienced lawyer immediately.
Julian Nacol, Attorney
Nacol Law Firm P.C.
NACOL LAW FIRM P.C.
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Dallas, Texas 75231
972-690-3333
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Attorney Mark A. Nacol is board certified in Civil Trial Law by the Texas Board of Legal Specialization
