Thursday, September 04, 2008

Third Party Beneficiaries May Be “Consumers” Under Texas Deceptive Trade Practices Law

This posting was written by Andrew Soubel, Editor of CCH State Unfair Trade Practices Law.

A widow could pursue a Texas Deceptive Trade Practices Act (DTPA) claim, on behalf of her children, against funeral and cemetery operators for deceptive acts in the burial of their father, the Texas Court of Appeals has ruled. The children were “consumers” with standing to bring the action under the DTPA as third party beneficiaries.

During the decedent's illness, his wife purchased a cemetery plot. After his death, the cemetery initially buried the decedent’s body in the wrong plot. Sometime later, the widow went to visit the grave and discovered that the decedent had been moved to the correct plot. The widow brought suit on behalf of her children, alleging that the funeral and cemetery operators improperly buried the decedent and then moved the body without her consent.


The defendants argued that the children lacked standing to bring suit because they were not “consumers” within the DTPA. The statute defines a "consumer" as "one who seeks or acquires by purchase or lease, any goods or services." It was undisputed that the widow was the person who purchased the cemetery plot. However, the court held that a third-party beneficiary may qualify as a consumer as long as the transaction was specifically required by or intended to benefit the third party and the goods or service were rendered to benefit the third party.

The court noted that no Texas decision addressed who the intended beneficiaries were when a cemetery plot or funeral service was purchased, but Texas courts had allowed immediate family members to bring common-law actions for mishandling a corpse. If a company taking possession of a body had a duty to a decedent's children, the court reasoned that the defendants' interment services were intended for the benefit of the decedent's family and that each family member was a consumer.

Unconscionable Acts

The defendants' actions were unconscionable in violation of the DTPA, the court ruled. The DTPA allowed for recovery for any unconscionable action or course of action that produced damage. To prove an unconscionable action or course of action, a plaintiff had to show that the defendant took advantage of her lack of knowledge and that the resulting unfairness was glaringly noticeable, flagrant, complete, and unmitigated.

The interment services company argued that the relevant inquiry should be limited to the time of the transaction. However, the company and the consumer entered into a purchase and perpetual care agreement that obligated the company to maintain the plot. The company moved the decedent's body without the family's permission, which could not have occurred accidentally but only as the result of an intentional act and only with the company's knowledge. Therefore, the court held the company committed an unconscionable act.

The August 7 decision is Service Corporation International v. Aragon, CCH State Unfair Trade Practices Law ¶31,645.

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