The Amarillo Court of Appeals has reversed a judgment on a $300,000 verdict for alleged knowing violations of the DTPA.
Wolfcreek Minerals, LLC and Brett Duke v. Warren Power & Machinery, L.P. d/b/a Warren Cant and Irock Crushers, LLC (No. 07-24-00056-CV; August 7, 2026) arose from a dispute over a lease-to-own contract for a rock crusher. Wolfcreek Minerals LLC, and its sole member, Duke, entered into a rental purchase option agreement (RPO) with Warren Cat and Irock Crushers, an equipment provider, for a TC-15CC rock crusher. The contract provided that Wolfcreek would rent the crusher for at least three months at $26,900 per four-week period, with an option to purchase for $633,097.85. Brett executed a personal guaranty for the obligations under the RPO. Things went sideways when the crusher failed to function as expected, requiring Wolfcreek to secure additional equipment and spend additional capital to satisfy the needs of its customer base. (Duke later alleged that Warren didn’t disclose that the crusher was a prototype model and misrepresented other support equipment would be provided at no additional charge.) Despite the poor performance, Duke exercised the purchase option in the RPO in October 2018. He confirmed intent to purchase, and received credit towards the transaction from the lease payments. He signed, but ultimately did not buy the allegedly defective rock crusher.
Wolfcreek and Duke filed suit for equipment failures and alleged misrepresentations, alleging fraud, breach of warranty, negligent misrepresentation, and DTPA violations. Warren asserted affirmative defenses and filed a counterclaim, seeking the unpaid balance under the lease agreement. A jury found that Irock committed fraud, Warren committed negligent misrepresentation, and both knowingly violated the DTPA, while Wolfcreek failed to pay all sums due to Warren under the RPO. The jury awarded actual damages of $24,500 against Warren and Irock, as well as $110,000 for knowing violations of the DTPA against Warren and $200,000 against Irock. It also awarded $41,822.27 in lease payments due to Warren under the RPO. Warren and Irock filed post-trial motions requesting the DTPA findings be disregarded on the basis of the large transaction exemption. The trial court granted those motions and rendered judgment that Wolfcreek take nothing on its DTPA claims. It also rendered judgment for Warren on its counterclaim plus attorney’s fees. Wolfcreek filed a motion for a new trial, which was overruled by operation of law. Both parties appealed.
In an opinion by Justice Doss, the court of appeals reversed in part and affirmed in part. First, the court addressed the application of the DTPA’s large transaction exemption, which exempts transactions or set of transactions relating to the same project involving total consideration of more than $500,000. Looking to the provisions of the RPO, the court determined that the minimum rental payments and purchase option created a unified transaction in which the total consideration promised by Wolfcreek exceeded $500,000. Wolfcreek argued that the purchase option should be excluded from total consideration, but the court ruled that “[t]his approach artificially fragments what the parties created: an integrated lease-purchase arrangement….Having contracted for the option’s benefits, Wolfcreek cannot now disclaim the burdens that flow from that same provision” (citations omitted).
Wolfcreek next challenged the trial court’s $115,394.57 attorney’s fees award to Warren. The court agreed with Wolfcreek, holding that at the time the parties executed the RPO, § 38.001, CPRC, allowed recovery of attorney’s fees from an “individual or corporation,” but not a limited liability company such as Wolfcreek. Warren argued that the RPO entitled it to recover attorney’s fees, thus overriding the statute, but the court determined that “the RPO contains no independent fee-shifting provision like those available” in cases Warren cited. By contract, the RPO only permitted Warren “remedies provided by applicable law.” And at the time of the contract’s execution, § 38.001 didn’t allow recovery of attorney’s fees against an LLC. Warren thus lost his attorney’s fees award.
Finally, Wolfcreek argued that the trial court erred by including a proportionate responsibility question in the jury charge without a sufficient basis for doing so. Warren also challenged the trial court’s remedy for that error. The charge asked the jury to apportion responsibility for negligent misrepresentation. It assigned 60% responsibility to Warren and 40% to Wolfcreek. Under § 33.012(a), CPRC, the trial court must reduce the claimant’s recovery by an amount equal to its percentage of responsibility. But here the trial court awarded Wolfcreek $60,000 without making a reduction, and the court of appeal couldn’t fix it by modifying a judgment in the absence of a finding that Wolfcreek was initially responsible. Warren argued that the proper remedy for the error was a new trial, not disregarding the jury’s findings that Wolfcreek bore a share of responsibility. The court agreed, holding that the trial court’s attempt to remedy the erroneous jury charge by disregarding the jury’s comparative fault finding was error, and that only a new trial could cure it.
As to Duke’s claim for mental anguish damages resulting from Warren and Irock’s fraud, the court found no evidence connecting his alleged harm to signing the personal guaranty for the RPO or that Duke suffered economic injury from doing so. His damages, instead, “resulted from Wolfcreek’s business problems rather than any fraudulent inducement related to the personal guaranty.” The trial court’s directed verdict on this issue was proper.
The court reversed the award of attorney fees to Warren and rendered judgment that Warren take nothing on this claim. It likewise reversed the part of the judgment pertaining to Wolfcreek’s claim for negligent misrepresentation against and remanded it for a new trial.
TCJL Intern Satchel Williams researched and prepared the first draft of this article.
