Unreported / Non-Citable
Background
Joshua Winchell contracted with Connected Solar, LLC in September 2023 to purchase and install a residential solar-panel system. After Winchell obtained approval from his electric company, Connected Solar did not install the system and later said it could not supply certain contractually specified components, offering substitute products instead.
Winchell sued for breach of contract and violations of the Texas Deceptive Trade Practices Act. Connected Solar was served through its registered agent but did not answer or appear at the default-judgment hearing. The trial court awarded Winchell $89,645.16 in actual damages, $268,935.48 in additional DTPA damages, $35,858.06 in prejudgment interest, and attorneys’ fees and costs. Connected Solar challenged those awards through a restricted appeal.
The Court’s Holding
The Fourth Court of Appeals held that the record supported only $80,680.64 in actual damages—the amount Winchell had paid, equal to 90% of the contract price—not the full $89,645.16 contract price. It modified and affirmed the actual-damages award accordingly. The court also held that prejudgment interest could not be imposed on additional DTPA damages and directed the trial court to award interest based on the revised actual-damages amount.
The court further held that the evidence was legally and factually insufficient to support enhanced damages for a knowing or intentional DTPA violation. Although the no-answer default established liability on properly pleaded claims, it did not establish unliquidated damages. Winchell’s evidence that Connected Solar later lacked the specified Tesla products and was later absent from Tesla’s authorized-installer website did not show that Connected Solar knew it could not perform, or intended not to perform, when the agreement was made.
The court reversed the additional DTPA damages and remanded for a new trial on unliquidated damages. Because the record did not allocate attorneys’ fees and costs among the claims and issues, it also reversed those awards and remanded them for redetermination following the new trial.
Key Takeaways
- A no-answer default admits properly pleaded liability allegations, but not the amount of unliquidated damages.
- Later nonperformance or product unavailability, without more, does not prove that a defendant knowingly or intentionally violated the DTPA when contracting.
- DTPA prejudgment interest may be calculated on actual damages, but not on additional or trebled damages.
Why It Matters
The decision underscores that plaintiffs seeking enhanced DTPA damages after a no-answer default must still present evidence of the defendant’s actual awareness or specific intent at the relevant time. A default alone does not supply the evidentiary basis for treble damages.
It also illustrates the remedy when unliquidated damages lack evidentiary support after an uncontested default hearing: reversal and a new trial on those damages, with related fee and cost awards subject to redetermination when they cannot be separated by issue.