This express disclaimer defense became the first issue that the Texas Supreme Court would tackle, along with the question of implied warranties for used goods.Issues: (1) Whether “express disclaimer” is an affirmative defense under Texas Rule of Civil Procedure 94. (2) Whether implied warranties apply to used-good purchasers. MAN raised its express-disclaimer argument for the first time in its Motion for JNOV. From the Court’s perspective, this violated the clear requirement that affirmative defenses must be raised in pretrial pleadings.

Godoy appealed, arguing that the waiver was void as against public policy. The court of appeals held that the guaranty waived the statute of limitations and Godoy failed to affirmatively plead his public-policy argument as a “matter constituting avoidance” under Texas Rule of Civil Procedure 94. In a unanimous opinion by Justice Blacklock (Justice Busby did not participate), the Supreme Court held that the guaranty waived the two-year statute of limitations for the debt-deficiency claim because the waiver was sufficiently “specific” and tailored to “a reasonable time.”

The Texas Rules of Civil Procedure require that specific defenses in any matter “constituting an avoidance or affirmative defense” shall be set forth affirmatively in a responsive pleading. Tex. R. Civ. P. 94. If an affirmative defense or avoidance is not expressly pleaded, the party cannot rely on the defense as a bar to liability. So the court had to decide whether the damages cap in Section 41.008 of the Texas Civil Practice and Remedies Code was an affirmative defense or an avoidance.

Godoy appealed, arguing that the waiver was void as against public policy. The court of appeals held that the guaranty waived the statute of limitations and Godoy failed to affirmatively plead his public-policy argument as a “matter constituting avoidance” under Texas Rule of Civil Procedure 94. In a unanimous opinion by Justice Blacklock (Justice Busby did not participate), the Supreme Court held that the guaranty waived the two-year statute of limitations for the debt-deficiency claim because the waiver was sufficiently “specific” and tailored to “a reasonable time.”

Secondly, the court held that the exemplary damages award did exceed the statutory cap and thus, reduced the damage award to $200,000. In reaching this decision, the court first looked at whether, because not explicitly stated, the damages cap fell into the residual category of Texas Rules of Civil Procedure Rule 94 governing affirmative defenses. It held that the exemplary damages cap did not bear the characteristics of an affirmative defense or avoidance, and therefore applied automatically.

In an opinion by Justice Guzman (joined by Chief Justice Hecht, and Justices Green, Willett, Lerhmann, Boyd, Devine, and Brown), the Court held that the retained asset provision was unambiguous and did not cover the restitution payments. Justice Johnson dissented and would have held that the agreement is ambiguous and remanded to the trial court for the jury to decide whether it included the restitution payments.No. 14-0067, Zorilla v. Aypco Construction II, Ltd. - The primary issue in this residential-construction dispute is whether the statutory cap on exemplary damages must be pleaded as an affirmative defense or avoidance under Texas Rule of Civil Procedure 94. The courts of appeals have been split on the question.

“Express Disclaimer” Is an Affirmative Defense That Must Be Pleaded Under Rule 94 The Court of Appeals also refused to consider the engine manufacturer’s language expressly disclaiming the implied warranty because the engine manufacturer failed to raise it as an affirmative defense in its pleadings. On appeal, the Supreme Court of Texas agreed with the Court of Appeals after concluding that the express disclaimer defense was an affirmative defense governed by Texas Rule of Civil Procedure 94. The engine manufacturer first raised the defense in its argument to the trial judge for a judgment notwithstanding the verdict.