Reliance Universal, Inc. v. Sparks Industrial Services, Inc.

688 S.W.2d 890, 42 U.C.C. Rep. Serv. (West) 423
CourtCourt of Appeals of Texas
DecidedMarch 28, 1985
Docket09 83 250 CV
StatusPublished
Cited by12 cases

This text of 688 S.W.2d 890 (Reliance Universal, Inc. v. Sparks Industrial Services, Inc.) is published on Counsel Stack Legal Research, covering Court of Appeals of Texas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Reliance Universal, Inc. v. Sparks Industrial Services, Inc., 688 S.W.2d 890, 42 U.C.C. Rep. Serv. (West) 423 (Tex. Ct. App. 1985).

Opinion

OPINION

BURGESS, Justice.

This is a Deceptive Trade Practices Act (DTPA) case, complicated by a plea in abatement question. The specific facts will be discussed as they relate to each point of error. The parties, for simplicity, will be referred to as Sparks and Reliance.

Point of error number one alleges the trial court erred in overruling Reliance’s plea in abatement. In July, 1980, Reliance filed an action in Harris County against Sparks alleging Sparks had failed to pay for materials sold and delivered to it. On September 9, 1980, Sparks filed suit in Orange County alleging Reliance had made certain express warranties concerning the materials and the materials were unfit for the purpose intended, had breached an implied warranty of merchantability, had breached the implied warranty of fitness, had engaged in false, misleading, or deceptive acts or practices, was negligent in failing to properly test and maintain the quality of the materials, was negligent in failing to properly supervise and instruct Sparks employees in the proper applications of Reliance’s products and had furnished a defective product under the doctrine of strict liability.

On September 30, 1980, a default judgment was entered against Sparks in Harris County. Subsequently, Sparks was granted a new trial. Sparks then filed a plea of privilege, and it was overruled. Sparks appealed and in December, 1980, the first Court of Appeals affirmed the Harris County trial court. In the meanwhile, Reliance had filed a plea in abatement seeking to abate the Orange County suit because of the prior suit being filed in Harris County. Reliance filed its plea alleging the parties and controversy in each suit were identical and thus, the Harris County suit having been filed first, the second suit should be abated. Curtis v. Gibbs, 511 S.W.2d 263 (Tex.1974) recognized the general common law rule in this area. The controlling issue in our case is whether or not Sparks’ causes of action were compulsory counterclaims under TEX.R.CIV.P. 97(a). If they were, abatement was required, if not, it was not required. In order for Sparks’ claims to be compulsory counterclaims they must have arisen out of the same transaction or occurrence. Reliance’s original claim in Harris County was based upon a failure to pay for material supplied, i.e., breach of contract. Some of Sparks’ claims in the Orange County action do arise out of the same transaction and are compulsory counterclaims. Some of Sparks’ claims, specifically, the negligence allegations, do not arise out of the sales contract. The sales transaction was completed upon the delivery of the materials to Sparks and Reliance’s course of action arose out of Sparks’ failure to pay for the materials. Venue in that case was set because the sale invoices call for payment in Harris County. Sparks’ negligence claims arose after the sales transaction was completed and when Reliance came to Orange County to aid Sparks in applying the materials to the railway cars. These alleged negligent acts were separate and apart from any contract for the sale of materials. Therefore, they are not compulsory counterclaims.

If part of Sparks’ course of action is not a compulsory counterclaim, then the trial court is not required, as a matter of law, to abate the second action. We find no abuse of discretion in not abating. Point of error number one is overruled.

The second point of error claims the trial court erred in submitting the damage *892 issue and, thereafter, erred in not granting Reliance’s motion for judgment notwithstanding the verdict because the damages were limited by the contract between Sparks and Reliance.

In January 1980, Sparks contacted Reliance about the purchase of paint in order to reline some railroad hopper cars belonging to Cities Services Company. Several orders were placed and the transaction, several invoices and packing slips were received by Sparks. Reliance claims these invoices constituted a written contract between the parties and each invoice and packing slip contained language which limited Reliance’s liability. The following language appeared:

Since methods and conditions of application and use are beyond our control, the products described below are sold and received without warranty of suitability or fitness for Buyer’s particular purpose and subject to the condition that Seller’s liability as to any product (a) is limited to a failure of the product caused by its non-conformance with the original shipment or sample sent to the Buyer, as to which written claim is made within 30 days from date of shipment, and (b) is in any event limited to the return of the purchase price. Please see. Condition 2 and other conditions on the reverse side of the customers [sic] acknowledgment for complete terms of sale.

Reliance alleges the language in the invoices are part of the contract and are allowable under TEX.BUS. & COM.CODE ANN. sec. 2.719 (Vernon 1968). The effect of this would be to limit Reliance’s liability to the purchase price of the paint.

Sparks answers that TEX.BUS. & COM. CODE ANN. sec. 1742 (Vernon Supp.1985) makes such clauses void and unenforceable, that TEX.BUS. & COM.CODE ANN. sec. 2.316 (Vernon 1968) requires such clauses to be “conspicuous” and that the clause in question is not, and that the clause is effective only to limit a recovery based upon contract and not a recovery based upon violations of the DTPA. As to Sparks first contention, Ellmer v. Delaware Mini-Computer, 665 S.W.2d 158 (Tex.App.—Dallas 1983, no writ) addressed the question of whether sec. 17.42 of the DTPA rendered provisions made under 2.719 unenforceable. The court stated at 161: “We conclude the question has been resolved adversely to Datafast by G-W-L, Inc. v. Robinchaux, 643 S.W.2d 392 (Tex.1982), where the Supreme Court gave effect to the disclaimer in a deceptive trade practice case.” Our reading of G-W-L, Inc. v. Robinchaux, supra, does not lead us to the blanket statement of the Dallas Court. G-W-L was breach of warranty case and we believe the Supreme Court’s holding is limited only to that type of action, not to deceptive trade practice cases in general. In any regard, see. 17.42 does not render contractual limitation clauses void and unenforceable in any and all cases.

Sparks’ next contention seeks to apply TEX.BUS. & COM.CODE ANN. sec. 2.316 (Vernon 1968) to the contractual limitations allowed by sec. 2.719. This would be the case, if the limitation in this case was an attempt to modify or excluded a warranty. It is not. It is a contractual limitation on the amount of damages recoverable.

A similar case is Rinehart v. Sonitrol of Dallas, Inc., 620 S.W.2d 660 (Tex.Civ.App.—Dallas 1981, writ ref’d n.r.e.). Here suit was brought for breach of an express warranty under the DTPA.

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Bluebook (online)
688 S.W.2d 890, 42 U.C.C. Rep. Serv. (West) 423, Counsel Stack Legal Research, https://law.counselstack.com/opinion/reliance-universal-inc-v-sparks-industrial-services-inc-texapp-1985.