Antitrust Law Daily Wrap Up, STATE UNFAIR TRADE PRACTICES—Tex. App.: Stuck on stucco: real estate developer awarded retrial to apportion damages, (Sep 30, 2014)

By Greg Hammond, J.D.

A Texas real estate developer has successfully appealed a trial court’s decision denying its request to identify the entity that installed stucco on a home purchased by two consumers. In reversing and remanding the case for a new trial, the Texas Court of Appeals in Beaumont determined that the trial court erred in denying the developer’s timely motion to designate a responsible third party, and that the company was harmed by the decision (Sun Development, L.P. v. Hughes, September 25, 2014, Horton, H.).

Background. Larry and Susan Hughes purchased a home from Sun Development, L.P., and later found out that the stucco system on the property was in need of extensive repair. Sun allegedly provided the couple with an inspection report that reflected no problems with the stucco, and failed to disclose two earlier reports identifying significant moisture issues. The Hugheses consequently filed suit against Sun, alleging that the developer engaged in deceptive trade practices in selling the home. A jury found in favor of the couple, and awarded actual damages of $647,713 on their Texas Deceptive Trade Practices Act (DTPA) claim, punitive damages in the amount of $85,000, and attorneys’ fees.

Sun appealed the lower court’s decision, arguing—in part—that the trial court erred in denying its request to identify the company that installed the stucco on the property as a responsible third party. According to Sun, the jury should have been asked to apportion the responsibility for the damages the Hugheses recovered.

Third party responsibility. Under the DTPA, defendants have the right to designate others as responsible third parties, and must move to designate a responsible third party on or before the sixtieth day before the trial date, unless the court finds good cause to allow the motion to be filed at a later date. According to the court in the instant case, Sun’s request to designate Shamrock Stucco—the company that installed the stucco on the Hughes’ property—as a responsible third party was timely. Further, because the jury would likely have found Shamrock responsible for the majority of the damages awarded to correct the problems on the Hughes’ home, the court concluded that the lower court’s decision was harmful to Sun. Consequently, the court reversed and remanded the case on all issues for a new trial. Sun will be required to file its motions designating others as responsible third parties, and the Hugheses will be given an opportunity to object to those motions.

The case number is 09-12-00524-CV.

Attorneys: Jonathan E. Fortman (Law Office of Jonathan E. Fortman, LLC) for Lia Smith-Hutchinson. Todd Evan Bryant (Ozion Brands, LLC) for ITS Financial, LLC, TCA Financial LLC, TCA Capital, LLC, and Tax Tree, LLC.

Companies: ITS Financial, LLC; TCA Financial LLC; TCA Capital, LLC; Tax Tree, LLC

Cases: StateUnfairTradePractices TexasNews