Kevin T. Morton v. Hung Nguyen and Carol S. Nguyen
412 S.W.3d 506
| Tex. | 2013Background
- In 2007, Kevin Morton (seller) and Hung and Carol Nguyen (buyers) entered a contract for deed with escalating interest and purchaser responsibilities for insurance, taxes, and HOA fees.
- The Nguyens paid about three years of installments and received annual statements, but Morton failed to provide all required disclosures under Property Code § 5.077(b).
- In November 2009, the Nguyens exercised their statutory right to cancel and rescind, demanding refunds of payments, taxes, and insurance premiums.
- Morton sued for breach of contract; the Nguyens counterclaimed for damages, rescission, and statutory penalties under Subchapter D and related provisions.
- The trial court found Subchapter D disclosures violated by Morton and awarded substantial damages, fees, and mental anguish to the Nguyens; appellate court partially reversed.
- This Court held that Subchapter D’s cancellation-and-rescission remedy requires mutual restitution, remanding for calculation of the Nguyens’ rental value for the intervening occupancy.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Does Subchapter D require mutual restitution in its cancellation-and-rescission remedy? | Morton argued for no mutual restitution under Subchapter D. | Nguyens argued Subchapter D does not codify mutual restitution as in common law. | Mutual restitution is required; buyers must restore benefits (rental value) to seller. |
| Are attorney’s fees and mental anguish damages recoverable after appellate reversal of specific claims? | Nguyens contended fees and mental anguish are still supported by remaining claims. | Morton argued none of the remaining claims support those damages. | Court reversed awards of attorney’s fees and mental anguish; remand for fee award if based on surviving theories. |
Key Cases Cited
- Cruz v. Andrews Restoration, Inc., 364 S.W.3d 817 (Tex. 2012) (restoration/restitution framework; Cruz controls mutual restitution analysis)
- Flores v. Millennium Interests, Ltd., 185 S.W.3d 427 (Tex. 2005) (punitive vs. nonpunitive characterization of Subchapter D remedies)
- Brown v. De La Cruz, 156 S.W.3d 560 (Tex. 2004) (damages framework under Subchapter D)
- Parkway Co. v. Woodruff, 901 S.W.2d 434 (Tex. 1995) (attorney’s fees principles in mixed judgments)
- Republic Underwriters Ins. Co. v. Mex-Tex, Inc., 150 S.W.3d 423 (Tex. 2004) (liberal briefing and appeal standards guiding review)
- Candler v. Hines, not listed ( Tex. 1992) (reference to general statutory interpretation approach)
- Hines v. Hash, 843 S.W.2d 464 (Tex. 1992) (statutory interpretation: purpose when silent on noncompliance)
- Christus Health Gulf Coast v. Aetna, Inc., 397 S.W.3d 651 (Tex. 2013) (textual/plain-language approach to statutory interpretation)
- Traxler v. Entergy Gulf States, Inc., 376 S.W.3d 742 (Tex. 2012) (statutory interpretation and text-focused analysis)
- In re Allen, 366 S.W.3d 696 (Tex. 2012) (principles for interpreting unambiguous statutes; legislative intent)