Court Opinion

ID: 9765626
Source: CourtListenerOpinion
Date Created: 2023-08-29 04:11:03.170379+00
Date Added: 2024-06-11T07:30:12.448933
License: Public Domain

O’CONNOR, Justice,
dissenting.
This case involves the statute of limitations and the discovery rule under the De*500ceptive Trade Practices-Consumer Act.1 The issue is whether a party may ignore a written notice that informs him that he has no contract. The majority says he can; I say he cannot.
Southwestern Bell filed suit against Lyles in July 1988, for breach of two agreements for directory advertising in the 1986 and 1987 Yellow Pages. Initially, Lyles filed a general denial, but in April 1990, 20 months after the suit had been filed and one month before trial, Lyles amended his answer to add counterclaims for, among other things, a suit for violations of the DTPA. Lyle’s theory of his DTPA suit was that Southwestern Bell’s representatives, in obtaining a $5,000 deposit, told him the deposit would apply toward the 1988 advertisement. Instead of applying the deposit to the 1988 advertisement, Southwestern Bell applied it to the balance on Lyles’ 1986 and 1987 accounts. Lyles argued at the trial court and here that Southwestern Bell gave him to understand that it would apply the $5,000 to reserve his advertising for the 1988 yellow pages. Thus, Lyles contends, when Southwestern Bell applied the deposit to the 1986 and 1987 accounts and Lyles was not able to get into the 1988 book, Southwestern Bell’s actions on December 9, 1987, amounted to a deception for which he had a DTPA cause of action.
Lyles does not challenge the date of the initial misrepresentation. In his brief, Lyles states, however, that he did not understand that it was a misrepresentation (that his advertisement would not be in the 1988 book) until May 8, 1988, which is within the two-year statute of limitation. The trial court agreed with Lyles on the issue of discovery and found that the counterclaim was not barred by limitations.2 Lyles does not maintain that he did not discover he would not be in the 1988 book until May 8, 1988, but merely that he did not understand he would be in the Yellow Pages by that date.
Lyles cites no authority that a party’s understanding of his rights is the foundation of the discovery rule. The question is not the party’s understanding of the rights. Rather the question is when did Lyles discover, or when should he have discovered (in the exercise of reasonable care and diligence), the facts that established his DTPA cause of action?
1. When did Lyles discover the misrepresentation?
The first part of test in the discovery rule requires us to determine when Lyles discovered his advertisement was not in the 1988 Yellow Pages. The majority states that Lyles testified that he did not realize his advertisement was being excluded from the 1988 directory until May 7 or 8, 1988, when he was told that the Yellow Pages was closed and his ad was not included.3 If Lyles did not realize his advertisement was excluded until May 7 or 8, it is not because Southwestern Bell did not tell him much earlier. Here is a review of communications from Southwestern Bell to Lyles after the critical December 9, 1987, meeting:
2-4-88 Lyles received a contract from Southwestern Bell that was “zeroed-out,” and showed that Lyles had no 1988 advertising. Exhibit 34.
2-4-88 Lyles received a certified letter from Southwestern Bell telling him that he would have no 1988 advertising. Exhibit 35.
3-1-88 Lyles received a final notice from Southwestern Bell that his delinquent account had been fully accelerated and that *501he was disqualified from future advertisement. Exhibit 36.
Exhibits 35 and 36 are reproduced in the appendix to this opinion.
The majority dismisses all three notices on the ground that the representatives from Southwestern Bell told Lyles at the December 9, 1987 meeting to ignore any “computer generated billings.” Even if Lyles’ testimony that a representative of Southwestern Bell made that statement is to be believed (Southwestern Bell disputes it), and Lyles could ignore any “computer generated billings,” that did not give Lyles permission to ignore the contract that showed he had no 1988 advertisement and two letters telling him he had no 1988 advertisement. The contract and the two letters were neither “computer generated” nor “billings.”
To discount the effect of the February 4, 1988, letter, the majority relegates it to a footnote and criticizes it for being a form letter. The majority acknowledges that the letter was signed by Bechner, the same representative who, according to Lyles, told him to disregard any computer generated billing statements he might receive. If Bechner actually told Lyles to ignore computer generated billing statements, a letter from Bechner telling him that he no longer had any advertisement would certainly undo the effect of the earlier oral statement.
In addition, Lyles testified he was “thoroughly shocked” by the February 4, 1988, letter. If Lyles was thoroughly shocked by the letter, certainly it was because it informed him he no longer had an advertisement in the 1988 book. Lyles elaborated on his interpretation of the letter in his testimony at trial:
I took it to mean what it says, that your paid ’88 advertising is taken out of the book, and that you are now going to have to pay your past due amounts that is not the amount that our books reflected, and that we’re not giving you any credit or adjustments, and thanks for the five thousand. You’re not going in the book after eight or nine years.
Even under the majority’s test, most would hold that Lyles, by this testimony, admitted he knew he had no advertising in the 1988 book on February 4, 1988, and limitations began to run on that date.
Other testamentary evidence that supports Southwestern Bell’s claim that Lyles had notice much earlier than May 7, was the testimony of Lyles and his agent Combes. Both testified Lyles hired Combes to, among other things, get him into the 1988 book. Lyles hired Combes after the December 9, 1987, meeting, and thus both knew that he was not in the 1988 book after that meeting. Combes also testified that he knew the $5,000 payment was applied to the 1986 and 1987 delinquent accounts.
In my opinion, Lyles was put on notice by the February 4, 1988 letter that he had no advertising in the 1988 book, and the statute of limitation began to run on that date. If we applied that date, we would hold that Lyles delayed too long in filing his counterclaim.
2. When should have Lyles discovered the misrepresentation?
Even if the February 4 “zeroed out” contract, the February 4 letter, and the March 1 letter were not sufficient notice to Lyles that he was not in the 1988 book, we must then ask when Lyles, in the exercise of reasonable diligence, should have discovered that he was not in the 1988 book? If those three documents did not put Lyles on actual notice that he had no advertisement in the 1988 book, when should he have discovered that he had no advertisement in 1988 book?
The second part of test in the discovery rule requires us to determine when Lyles should have discovered he was not in the 1988 Yellow Pages. Woods v. William M. Mercer, Inc., 769 S.W.2d 515, 517 (Tex.1988). To answer this question, we must apply the reasonably prudent person standard: When did the person who seek the benefit of the discovery rule have enough information to lead him, as a reasonably prudent person, to make an inquiry that would lead to the discovery of the wrong? Id. For limitations purposes, a party’s knowledge of facts, conditions, or circum*502stances which would cause a reasonable person to make inquiry is, in law, the equivalent to actual knowledge of the cause of action. See Borderlon v. Peek, 661 S.W.2d 907, 909 (Tex.1988) (limitations in a medical malpractice case).
If the February 4 “zeroed out” contract, the February 4 letter, and the March 1 letter were not actual notice (which I believe they were), under the second part of the test, they would have caused a reasonably prudent person to make an inquiry about the status of the advertisement in the 1988 book. Instead of applying the reasonably prudent person test, the majority takes at face value Lyles’ statement that he did not understand his advertisement was not in the Yellow Pages until May 8, 1988. In failing to apply the reasonably prudent person test, the majority errs.
I would sustain this point, and reverse and render in favor of Southwestern Bell.
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.Tex.Bus. & Com.Code § 17.565, states:
All actions brought under this subchapter must be commenced within two years after the date on which the false, misleading, or deceptive act or practice occurred or within tow years after the consumer discovered or in the exercise of reasonable diligence should have discovered the occurrence of the false, misleading or deceptive act or practice.

. The court made the following finding of fact on the issue of discovery: Lyles could not have reasonably discovered these deceptive trade practices prior to May 8, 1988, which represents the date that limitations began to run on his DTPA counterclaim.

. In his pleadings, Lyles contends that he did not discover that his advertisement was not in the 1988 book until after it was published. (Tr. 542.)