## Facts

- William and Mildred Wechter contracted to buy a townhouse from Leyendecker & Associates, Inc. after being told they could purchase a corner lot slightly larger than standard.
- At contract signing, the Wechters received only a block-and-lot reference and were not given measurements.
- At the November 1976 closing, they first received a metes-and-bounds description and a survey.
- After moving in, a fence installation led the Wechters to question the boundary lines; the deed and survey mistakenly included 2,411 square feet of subdivision common area.
- Leyendecker and the title company tendered a correction deed; the Wechters refused to sign it.
- The Wechters also complained of construction defects and sought assistance from the Greater Houston Builders Association.
- Leyendecker employee Chris Hilliard sent a letter to the Builders Association (and copied the Veterans Administration) accusing the Wechters of improper conduct, including allegedly seeking fraudulent insurance claims and suing neighbors over common area.
- The Wechters sued for DTPA violations (misrepresentation and defective workmanship) and for libel based on the letter.

## Issues

1. What is the proper measure and timing of DTPA damages for misrepresentation concerning lot size when a deed description includes property the buyer does not own?
2. Whether the evidence supported DTPA recovery for defective workmanship in the townhouse construction.
3. Whether the letter’s accusations constituted libel per se under Texas law.
4. Whether private plaintiffs in a private dispute must prove actual malice or only negligence to recover for defamation.
5. What standards govern recovery of mental anguish and exemplary damages in the defamation claim.

## Decision

- The Texas Supreme Court affirmed in part and reversed and rendered in part the court of appeals’ judgment.
- The court held that DTPA misrepresentation damages should be measured by an out-of-pocket, transaction-time valuation rather than later appreciation.
- The court upheld DTPA liability and damages for defective workmanship.
- The court held the letter was libelous per se because it imputed dishonest and fraudulent conduct to the Wechters.
- Because the Wechters were private individuals and the dispute was not a matter of public concern, the court applied a negligence standard rather than requiring proof of actual malice.
- The court left defamation liability intact but modified certain components of the defamation damages (including aspects of mental anguish and/or exemplary damages).

## Legal Principles

- DTPA misrepresentation damages in a real estate transaction are tied to the buyer’s loss at the time of the transaction, not subsequent market changes.
- Residential construction defects may support DTPA relief when supported by evidence of defective workmanship and resulting damages.
- Statements imputing fraud or dishonesty to a person can constitute libel per se, permitting recovery without proof of special damages.
- In defamation actions by private individuals arising from private disputes, Texas may require proof of negligence rather than actual malice.
- Appellate courts may reduce or render take-nothing relief as to particular defamation damage elements when evidentiary support or required culpability is lacking, even while sustaining liability.

## Conclusion

The court treated DTPA misrepresentation damages as an out-of-pocket loss measured at the time of sale, upheld DTPA recovery for defective workmanship, and held that false accusations of fraud in a private dispute were libel per se requiring only negligence for private plaintiffs, while revising parts of the defamation damages award.


Leyendecker & Assocs., Inc. v. Wechter, 683 S.W.2d 369 (Tex. 1984)