In Gupta v. Ritter Homes, Inc., 646 S.W.2d 168, 169 (Tex. 1983), the court recognized that an implied home warranty could pass to subsequent buyers. Other courts have agreed. “While it appears we have never addressed the same issue regarding express warranties, several lower courts have applied the same rule in that context—express warranties pass with the goods.” PPG Indus., Inc. v. JMB/Houston Centers Partners Ltd. P’ship, 146 S.W.3d 79, 88 (Tex. 2004).
However, PPG Indus. states that downstream claimants (or subsequent purchasers) may not be able to plead the warranties under the DTPA.
But in Amstadt v. U.S. Brass Corp., we held downstream purchasers of non-mobile homes could not bring DTPA claims against remote manufacturers and suppliers of a defective plumbing system, because the deceptive acts alleged were not committed against or communicated to them in connection with their own purchases. Recognizing the similarity to this case, JMB asserted no DTPA claims in its own right, as it had no connection with PPG’s original Twindows sale, and never saw any PPG advertisements or warranties before it bought the building.
Thus, we have established a clear distinction between DTPA and warranty claims: a downstream buyer can sue a remote seller for breach of an implied warranty, but cannot sue under the DTPA. Clearly, if warranty claims are assignable because they are “property-based,” DTPA claims must be something else; there must be a “personal” aspect in being “duped” that does not pass to subsequent buyers the way a warranty does.
The Court seems to miss the mark. The DTPA is actionable under the laundry list (which includes misrepresentations) and, the DTPA is separately actionable under a breach of warranty. The Court set a precedent in Amstadt, stating that misrepresentations were not actionable under a DTPA if the consumer did not know of the representations. In other words, reliance on the misrepresentations could not occur, if the consumer was ignorant of the misrepresentations at the time of sale or lease.
The Court incorrectly states that there is a clear distinction between DTPA and warranty claims. In fact, warranty claims may expressly be brought through the DTPA. Tex. Bus. and Com. Code § 17.50(a)(2). They are not “clearly distinct.” In fact, they are statutorily intertwined.
What is distinct are the laundry list claims described in Tex. Bus. and Com. Code § 17.50(a)(2) and the ability to bring warranty claims under the DTPA. For one, the laundry list law is created in the statute. Contrarily, it is widely recognized that the DTPA does not create any warranties and that the DTPA serves only as a vehicle to bring warranties created outside of the DTPA. Clearly, laundry list claims under the DTPA and warranty claims under the DTPA are different. Laundry list claims are about being duped, but it is a basic tenant of warranty law, that intent is irrelevant to warranty claims.
Even so, the Court uses the Amstadt principle, which applied to a laundry list claim, and improperly applied that principle to the DTPA warranty claims in order to vitiate a subsequent owner’s ability to bring a breach of warranty claim under the DTPA. If the Court wanted to make downstream sellers ineligible to pursue warranty claims under the DTPA, it could have used a better rationale.