Court Opinion

ID: 9778286
Source: CourtListenerOpinion
Date Created: 2023-08-29 20:58:24.874208+00
Date Added: 2024-06-11T07:33:06.902922
License: Public Domain

CORNYN, Justice,
concurring, joined by GAMMAGE and SPECTOR, Justices.
I join the Court’s judgment, but for different reasons from those given in the Court’s opinion. The Court concludes that, in the context of an “as is” sale, the statement “There are no defects in this building,” is not an actionable misrepresentation “unless the maker knew it was false,” supra, 896 S.W.2d at 161, and that an “as is” sale makes it “impossible for the buyer’s injury ... to have been caused by the seller.” Supra, 896 S.W.2d at 161. Under current Texas law, I disagree on both counts.
The Court holds that the “as is” clause, as a matter of law, negates producing cause. To avoid running afoul of the non-waiver provisions of the DTPA, the Court characterizes the clause as “a statement that no basis exists for the assertion of [DTPA] rights,” supra 896 S.W.2d at 164, rather than as a waiver of DTPA rights. In my view, this is a distinction without a difference and cannot be conclusive of Prudential’s DTPA liability.
Never before has this Court questioned the enforceability of the non-waiver provision of section 17.42 of the DTPA. Only when exacting requirements are met can a consumer waive the provisions of the DTPA, and neither party argues that these requirements were met in this ease.1 Otherwise, the Leg*166islature has unequivocally declared that “[a]ny waiver by a consumer of the provisions of this subchapter is contrary to public policy and is unenforceable and void....” (emphasis added). Tex.Bus. & Com.Code § 17.42. Consistent with this statute, just four years ago we held that contractual liability limitations are invalid under section 17.42 insofar as they purport to waive liability for an act defined as deceptive under section 17.46(b), the DTPA laundry list of prohibited acts. Southwestern Bell Tel. Co. v. FDP Carp., 811 S.W.2d 572, 576 (Tex.1991). Again, only nineteen months ago we reiterated “that when representations are made, a consumer cannot waive DTPA protection.” First Title Co. v. Garrett, 860 S.W.2d 74, 77 (Tex.1993). Now, inexplicably, the Court reverses course and rewrites the DTPA.
Under the Court’s holding, an “as is” clause precludes a DTPA action for misrepresentation unless the contract can be set aside under traditional contract doctrines, such as fraud or coercion. Although the Court strains to limit its holding to the facts of this case, I doubt that is possible.
The rationale by which the Court decides this case will have broad application no matter how much the Court attempts to qualify its holding. First, the Court’s holding does not prevent insertion of an “as is” clause in a form contract in routine consumer transactions. Unless tainted by fraud, coercion, or grossly disparate bargaining power, this clause will from now on insulate the seller from DTPA liability as a matter of law, even if the consumer fails to notice it, or having read it, misunderstands its legal implications. As in this case, this will be true even if the seller makes misrepresentations about the product. It is not enough to point out that this particular “as is” clause was negotiated by the parties. Under Texas law, parties are generally bound by their contracts whether the contracts were vigorously negotiated or not. While I am sympathetic to the notions of freedom of contract upon which the Court’s decision appears grounded, the Legislature has preempted the common law in this area and, as a matter of public policy, explicitly banned the use of waivers of the DTPA except in limited situations not applicable here. The Court has simply substituted its will for that of the Legislature. Even if the Court views this outcome as preferable public policy, it should defer to the Legislature as the primary policy maker, especially in a field in which the Legislature has been so active in revising and amending the governing statute.2
Second, the Court’s holding is unlikely to be limited to traditional “as is” clauses. An “as is” clause in a contract effectively disclaims only implied warranties. Mid Continent Aircraft Corp. v. Curry County Spraying Serv. Inc., 572 S.W.2d 308, 313 (Tex.1978). We have never held that an “as is” clause automatically bars actions on express warranties3 or misrepresentations. To the contrary, we have repeatedly held that contractual provisions that do not comply with section 17.42 are unenforceable. This rule also makes common sense. A seller should not be able to misrepresent some fact essential to the consumer’s decision to buy, and then automatically avoid liability by asserting a contractual disclaimer of all DTPA liability. Yet the Court’s holding would allow any “as is” clause to preclude liability for all non-fraudulent misrepresentations.
I would hold that the existence of the “as is” clause in this case is relevant to the producing cause inquiry; but it is not controlling, as the Court holds. Because the clause asserts that the buyer is not relying upon any representations made by the seller, it is pertinent to the question of whether the *167misrepresentation caused the buyer’s damages. When the seller can establish to the jury’s satisfaction that the clause was actually negotiated in an arms-length transaction, the seller may indeed prevail, but this fact issue should not be decided by a court as a matter of law, as the Court does today.
There is, however, an alternative basis for the Court’s judgment. I agree with Prudential that there is no evidence that Donna Buchanan’s innocent misrepresentation of “no defects” was a producing cause of Goldman’s losses. While Goldman need not prove reliance on the statement, see Weitzel v. Barnes, 691 S.W.2d 598, 600 (Tex.1985), the producing cause requirement under the DTPA mandates proof that the statement was a cause-in-fact of the damages suffered. See Lear Siegler, Inc. v. Perez, 819 S.W.2d 470, 471-72 (Tex.1991); accord McClure v. Allied Stores of Texas, Inc., 608 S.W.2d 901, 903 (Tex.1980). Proof of producing cause, therefore, must include proof that the misrepresentation “was a substantial factor in bringing about the injury and without which no harm would have occurred.” McClure, 608 S.W.2d at 903.
I find no evidence in the record that Buchanan’s statement influenced Goldman’s behavior in any way. In fact, the evidence points to the opposite conclusion. Goldman was a sophisticated real estate investor who performed his own evaluation and inspection of the Jefferson building in making his purchase decision. He testified that he would have purchased the Jefferson building even if Ms. Buchanan had told him it contained Mo-nokote. Furthermore, there is no claim that Ms. Buchanan had any special expertise on such matters, and the statement attributed to her was admittedly made in an informal setting without reference to any specific characteristic of the building. In this context, there is no evidence that this statement was a substantial factor in Goldman’s decision to buy the building.
Without evidence of causation, Goldman’s claim must fail. Thus, I concur in the Court’s judgment.

. Under the pre-1989 version of § 17.42 of the DTPA, for a waiver to be effective the defendant had to prove that the consumer (1) had assets over $5 million, (2) had experience in financial and business matters that enabled it to evaluate the merits and risks of a transaction, and (3) was *166not in a significantly disparate bargaining position. TejcBus. & Com.Code § 17.42 (1987).

. As this is being written, the Texas Senate is debating amendments to this very statute. See Tex.S.B. 26, 74th Leg., R.S. (1995) (proposing, among other things, to exclude from DTPA coverage claims by partnerships and corporations, to limit the applicability of the DTPA to transactions valued a $500,000 or less, and to require all violations to be made "knowingly” before recovery is allowed).

. See Tex.Bus. & Com.Code § 2.313(a) (providing that express warranties are created by either an affirmation of fact or promise relating to the goods, or a description of the goods, or a sample or model, which becomes a part of the basis of the bargain).