Michael Hutton, Individually and for the Benefit of Certain Customers of Michael Hutton Jewelry Design v. National Guardian Security Services Corp.--Appeal from 261st District Court of Travis County

TEXAS COURT OF APPEALS, THIRD DISTRICT, AT AUSTIN
NO. 03-93-00601-CV
Michael Hutton, Individually and for the Benefit of Certain Customers
of Michael Hutton Jewelry Design, Appellant
v.
National Guardian Security Services Corp., Appellee
FROM THE DISTRICT COURT OF TRAVIS COUNTY, 261ST JUDICIAL DISTRICT
NO. 481,245, HONORABLE W. JEANNE MEURER, JUDGE PRESIDING

Michael Hutton appeals from a summary judgment that he take nothing by his two causes of action against National Guardian Security Services Corporation. We will affirm the trial-court judgment.

 
THE CONTROVERSY

Under a contact between them, Greater Austin Security Central, Inc. ("GASC") installed a security system in Hutton's jewelry-repair shop. (1)

About two years afterwards, GASC sold all its assets to National Guardian. (2) Burglars subsequently stole from the shop certain jewelry that had been left there for repair. Based on allegations that the security system failed, causing his customers' losses, Hutton sued as their bailee or agent alleging against National Guardian his customers' causes of action for common-law negligence and their statutory causes of action for deceptive trade practice. See Deceptive Trade Practices--Consumer Protection Act ("DTPA"), Tex. Bus. & Com. Code 1750 (West 1987 & Supp. 1995); Waggoner v. Snody, 85 S.W. 1134, 1135 (Tex. 1905) (bailee may sue third party for damage or destruction of chattel and recover its full value as bailor's agent).

On summary judgment, the trial court ordered that Hutton recover nothing by his causes of action. Hutton appeals on two points of error. The facts are undisputed in all material respects. We will draw from them all reasonable inferences that favor Hutton's claims. See Nixon v. Mr. Property Management Co., 690 S.W.2d 545, 548-49 (Tex. 1985).

 
DTPA CLAIMS

Under Hutton's first point of error, the parties dispute whether the summary judgment record shows as a matter of law that Hutton's customers were "consumers." The status of "consumer" is, of course, essential for a plaintiff to maintain a statutory cause of action for deceptive-trade practice. See DTPA 17.50(a). For purposes of the DTPA, a "consumer" means "an individual . . . who seeks or acquires by purchase or lease, any goods or services." DTPA 17.45(4) (emphasis added). It is not necessary that the plaintiff be a party to the transaction in which the goods or services were "acquired." Whether the plaintiff "acquired" the goods and services depends upon the plaintiff's "relationship to a transaction" rather than his or her relationship with the defendant. See Melody Home Mfg. Co. v. Barnes, 741 S.W.2d 349, 353 (Tex. 1987).

When the plaintiff is not a party to the contract under which goods or services are acquired, he is nevertheless a "consumer" for purposes of the DTPA if his relationship to the transaction is that of an intended beneficiary; that is to say, if the contracting parties intended that he have the use or benefit of the goods or services acquired under the contract by the purchaser or lessee. See, e.g., Birchfield v. Texarkana Memorial Hosp., 747 S.W.2d 361 (Tex. 1987) (newborn infant "acquired" benefit of medical supplies and services furnished by hospital under contract with infant's parents); Kennedy v. Sale, 689 S.W.2d 890, 892 (Tex. 1985) (employee "acquired" benefit of group-insurance policy purchased by employer for his employees); D/FW Commercial Roofing Co. v. Mehra, 854 S.W.2d 182 (Tex. App.--Dallas 1993, no writ) (tenant "acquired" benefit of roof-repair services furnished by roofer under contract with landlord when roof torn from tenant's leased building); Allied Towing Serv. v. Mitchell, 833 S.W.2d 577 (Tex. App.--Dallas 1992, no writ) (pool-hall patron held to have "acquired" use of automobile-parking privilege leased from property owner by pool-hall operator for customer parking); HOW Ins. Co. v. Patriot Fin. Serv., Inc., 786 S.W.2d 533 (Tex. App.--Austin 1990, writ denied) (purchaser of condominium unit "acquired" benefit of homeowner's warranty and insurance purchased by seller from developer); Parker v. Carnahan, 732 S.W.2d 151 (Tex. App.--Texarkana, writ denied) (former wife "acquired" benefit of legal and accounting services purchased by her husband from accountant and lawyers); see also Wellborn v. Sears, Roebuck & Co., 970 F.2d 1420 (5th Cir. 1992) (teenage son "acquired" use of automatic garage-door opener purchased by his mother from defendant).

On the other hand, a stranger to the contract cannot be a "consumer" for purposes of the DTPA, even though he may be an incidental beneficiary, when the circumstances do not justify a conclusion that the contracting parties intended that he have the use and benefit of the goods or services acquired. See Kitchener v. T.C. Trailers, Inc., 715 F. Supp. 798 (S.D. Tex. 1988) (borrower of horse trailer did not "acquire" it in owner's purchase from manufacturer); see, e.g., Brandon v. American Sterilizer Co., 880 S.W.2d 488, 492 (Tex. App.--Austin 1994, no writ) (employee using equipment containing toxic chemicals did not "acquire" its use by reason of employer's purchase of the equipment from manufacturer); Lara v. Lile, 828 S.W.2d 536 (Tex. App.--Corpus Christi 1992, writ denied) (contractor's employee did not "acquire" transportation services supplied by subcontractor, even though employee was incidental beneficiary of subcontractor's implied duty to operate its truck safely); Rodriguez v. Ed Hicks Imports, 767 S.W.2d 187 (Tex. App.--Corpus Christi 1989, no writ) (automobile passenger did not "acquire" its use or benefit in dealer's sale to driver).

The transaction of purchase or lease is evidenced by the contract between Hutton and GASC. It contradicts expressly and directly any imputation that the sale or lease of the security system was intended for the use or benefit of anyone but the parties. The presumption is that parties contract for themselves alone. Nothing in the summary judgment record contradicts that presumption; the contract is consistent with it. We overrule Hutton's first point of error.

 
NEGLIGENCE CLAIMS

In a second point of error, Hutton contends the trial court erred in its judgment that Hutton take nothing by his customers' negligence claims. The parties dispute whether National Guardian owed Hutton's customers a duty in tort, the prerequisite for a negligence action against National Guardian, based on Hutton's contact with GASC.

A negligence cause of action may rest upon an implied duty to perform a contract duty with reasonable care. See Montgomery Ward & Co. v. Scharrenbeck, 204 S.W.2d 508, 510 (Tex. 1947). The Scharrenbeck theory requires a contract duty in the first instance. Here National Guardian never owed Hutton's customers a contract duty. Hence Hutton may not recover in their behalf on the ground of negligence.

See Greater Houston Transp. Co. v. Phillips, 801 S.W.2d 523, 525 (Tex. 1990); Otis Eng. Corp. v. Clark, 668 S.W.2d 307, 312 (Tex. 1983).

For the reasons given, we overrule Hutton's two points of error. We need not, therefore, determine the two cross-points urged by National Guardian. We affirm the trial-court judgment.

 

John Powers, Justice

Before Justices Powers, Aboussie and B. A. Smith

Affirmed

Filed: March 8, 1995

Do Not Publish

1. In the contract, GASC promised to install in Hutton's shop certain devices that would signal the occurrence of unauthorized entries, and to inspect, repair, and adjust these devices as necessary for their proper operation. GASC retained title to the system. On his part, Hutton promised to test the system periodically, to ascertain whether it was operational, and to pay periodically the rental payments specified in the contract. The contract contained as well the following provisions:

 

a. GASC would not be liable for consequential or special damages arising out of the contract;

 

b. Hutton did not expect GASC "to insure or reimburse [Hutton] or any other person for losses from [burglaries]" (emphasis added);

 

c. GASC would not be liable for any loss because of any failure, defect, or damage regarding the system and should GASC be found liable for any loss owing to such failure, defect, or damage, because of negligence or some other basis, then such liability would be limited to $250 or one year's service charge, whichever is greater;

 

d. Hutton acknowledged that the sums paid by him under the contract were based on the charges and the scope of liability specified in the contract, and not upon the value of Hutton's property or the property of others located in the shop;

 

e. Hutton had chosen to pay such sums after making an election not to purchase GASC services with a higher limit of liability for correspondingly higher charges in specified increments.

2. National Guardian contends that it is not liable under GASC's contract with Hutton because it did not assume GASC's liabilities when it purchased GASC's assets. We need not discuss the issue because we find summary judgment was proper against Hutton on other grounds.