PPG Industries, Inc. v. JMB/Houston Centers Partners Limited Partnership

The Texas Supreme Court holds that assigning DTPA claims would defeat the primary purpose of the statute—to encourage individual consumers to bring such claims themselves. The personal and punitive aspects of DTPA claims cannot be squared with a rule allowing them to be assigned as if they were mere property. PPG Industries, Inc. v. JMB/Houston Centers Partners Limited Partnership, ___ S.W.3d ___ (2004).

One Houston Center, a 46-story skyscraper in downtown Houston, was completed in April 1978 and originally owned by Houston Center Corporation (HCC). The exterior included more than 12,000 dual-pane glass window units manufactured and installed by PPG. By July 1982, a large number of the windows showed fogging and discoloration. At HCC’s request, PPG manufactured and installed replacements for one-fourth of the building’s windows pursuant to a contractual warranty. The replacement project took more than 2 years. Several years later, HCC entered negotiations to sell One Houston Center to JMB. During its due diligence, JMB learned of the earlier window problems, and that to a limited extent they continued. When JMB inquired whether any warranties still applied, PPG replied that all had expired. JMB bought the building “as is” in December 1989 as part of a $375 million purchase. HCC assigned to JMB all warranties relating to the building, and JMB waived all DTPA claims against HCC. When extensive window problems appeared in 1991, JMB sued PPG for violating DTPA and breaching warranties issued to HCC. A jury found for JMB on all claims, assessing the cost to replace every window in the building with comparable but non-defective window units at $4,745,037. The trial court trebled the award under the mandatory provisions of the DTPA, and after a bench trial awarded another $1,716,181 in attorney’s fees. The Court of Appeals affirmed the judgment of the trial court, joining several other courts that had held or assumed that DTPA claims are assignable, and the Texas Supreme Court granted a petition for review.

The Texas Supreme Court, reversing the Court of Appeals, held that DTPA claims generally cannot be assigned by an aggrieved consumer to someone else because (1) of the statutory differences between the UCC and the DTPA, (2) the personal litigation by consumers that was the DTPA’s primary purpose, (3) the personal and punitive nature of both DTPA claims and DTPA damages, and (4) the risks to the adversarial process. As the Court reasoned, assigning DTPA claims would defeat the primary purpose of the statute—to encourage individual consumers to bring such claims themselves. Emphasizing that the DTPA is primarily concerned with people—both the deceivers and the deceived, the Court held that this gives the entire Act a personal aspect that cannot be squared with a rule allowing DTPA claims to be assigned as if they were merely another piece of property. Nevertheless, the Court opined that its holding does not prohibit equitable assignments, such as contingent-fee interest assigned to a consumer’s attorney.

Further, considering JMB’s breach of warranty claims, the Texas Supreme Court concluded that the trial court erred in holding that JMB’s 5-year-warranty claim was not barred by limitations, and that its 20-year-warranty claim was a basis for the parties’ bargain as a matter of law. Accordingly, the Court reversed the judgment, and remanded the case for a new trial of the breach of warranty claims alone.