Antitrust Law Daily Wrap Up, STATE UNFAIR TRADE PRACTICES—TexAppCt: One Satisfaction Rule Did Not Apply to Texas Deceptive Trade Practices Act Claims Against Boat Retailer, (Jun 14, 2013)

By Jody Coultas, J.D.

A boat retailer failed to establish that it was entitled to summary judgment of Texas Deceptive Trade Practices Act (DTPA) claims on the grounds of the one satisfaction rule, according to a Texas appellate court (Matthews v. Sohn, June 13, 2013, Garza, D.).

Boat purchasers alleged that the retailer and a boat manufacturer violated the DTPA based on defects with the boat that were not disclosed. The purchasers and manufacturer settled the claim. Based on the one satisfaction rule, the retailer argued that the settlement with the manufacturer barred a second recovery from the retailer for the same injuries. A trial court granted the retailer’s summary judgment motion.

Plaintiffs may only recover once for an injury. The one satisfaction rule applies when defendants commit the same act as well as when defendants commit technically differing acts which result in a single injury. A non-settling defendant is entitled to offset any liability for joint and several damages by the amount of common damages paid by the settling defendant, but not for any amount of separate or punitive damages paid by the settling defendant.

Because the purchasers asserted punitive damages and the settlement did not entirely set-off the maximum liability, the court reversed the holding that the one satisfaction rule applied. The retailer was required to show that the one satisfaction rule applied because there was only one injury, the settlement credit entirely set-off the maximum amount of liability claimed by the purchasers, and punitive damages were not at issue. The only injury was the purchase of the boat. However, the court found that the settlement did not completely off-set the retailer’s liability.

The settlement was $275,000.00, but the purchasers asserted that they were entitled to additional damages of up to three times the amount of actual damages if they established a knowing or intentional violation of the DTPA. Also, punitive damages were an issue in the case. Therefore, the court held that the retailer was not entitled to summary judgment based on the one settlement rule.

The case is No. 13-12-00302-CV.

Attorneys: Randy Michel (Law Office of Randy Michel) for Ronald Matthews. Kevin Risley (Thompson Coe) for P.D. Sohn.

Cases: StateUnfairTradePractices TexasNews