Lead Opinion
delivered the opinion of the Court,
Chapter 5, Subchapter D of the Texas Property Code imposes various conditions and disclosure requirements on sellers entering into contracts for deed — also known as “executory contracts for the conveyance of real property.” . See Tex. PROp.Code §§ 5.061-.085. A seller’s failure to comply with Subchapter D’s requirements entitles a buyer to “cancel and rescind” a contract for deed and “receive a full refund of all payments made to the seller.” E.g., id.
I. Background
In January 2007, Kevin Morton, as seller, and Hung and Carol Nguyen, as buyers, entered into a contract for deed. The contract required the Nguyens to make a $5, 000 down payment and monthly installments of $1, 533.90 for approximately thirty-five years before obtaining the deed. The contract provided for an initial interest rate of 8.875%. After five years, the interest rate was set to escalate yearly by 1% until it reached 12.875%. The transaction was purportedly structured to encourage the Nguyens to seek out a new financing arrangement in a few years after rebuilding their credit. The Nguyens also agreed to pay for homeowners’ insurance, property taxes, and homeowners’ association fees. The Nguyens made payments for almost three years. During this time, Morton sent the Nguyens an annual statement that reported the amount of interest paid each year and the balance remaining under the contract. However, Morton did not provide the Nguyens with all of the information in the annual statement required by section 5.077 of the Property Code. See Tex. Prop.Code § 5.077(b) (providing that the annual statement must include, inter alia, the amount paid under the contract and the number of payments remaining under the contract).
In November 2009, the Nguyens notified Morton that they were exercising their statutory right to cancel and rescind the contract for deed. The Nguyens demanded return of all thirty-four monthly payments, the down payment, and the taxes and insurance premiums they paid during the contract’s term. Morton ordered the Nguyens out of the house and allegedly began to harass the Nguyens by demanding payments under the contract and demanding that they immediately vacate the property. Morton then sued the Nguyens for breach of contract. The Nguyens counterclaimed, seeking monetary damages, rescission, and statutory damages due to alleged violations under the Property Code, the Finance Code, and the Deceptive Trade Practices Act (DTPA). Morton asserted various affirmative defenses to the Nguyens’ counterclaims and alleged that he was entitled to a setoff in the amount of the fair market rental value of the property for the time the Nguyens occupied the house.
Following a bench trial, the trial court found that Morton failed to comply with various sections of Subchapter D pertaining to disclosures in contract-for-deed transactions. As a matter of law, the trial court found that Morton’s good-faith defense based on Flores v. Millennium Interests, Ltd.,
The court of appeals reversed the trial court’s judgment on liability for the statutory penalty under section 5.077 of the Property Code and remanded that issue to the trial court to determine whether Morton made a “good faith attempt to inform [the Nguyens] of the current status of their contractual relationship,” as laid out in Flores.
II. Subchapter D’s Cancellation- and-Rescission Remedy
We begin by noting that the court of appeals erred by holding that Morton waived the issue as to whether Subchapter D’s cancellation-and-rescission remedy incorporates the common law requirement of mutual restitution. Morton’s briefing at the court of appeals was sufficient under Rule 38.1(i) of the Texas Rules of Appellate Procedure to warrant consideration of the issue. See Tex.R.App. P. 38.1(f); see also Republic Underwriters Ins. Co. v. Mex-Tex, Inc.,
A contract for deed, unlike a typical secured transaction involving a deed of
Morton argues that Subchapter D’s cancellation-and-reseission remedy incorporates the common law principle of mutual restitution, which requires buyers under a contract for deed to restore the benefits they received under the rescinded contract. The Nguyens, oh the other hánd, argue that the Legislature did not intend to codify in Subchapter D the common law principle of the equitable remedy of rescission. We addressed a similar issue within the context of the DTPA in Cruz, and our analysis in that case instructs the issue presented here. See Cruz, 364 S.W.3d at at 824-26.
In Cruz, a consumer sought the remedy of “restoration” under section 17.50 of the Business and Commerce Code for alleged DTPA violations. Id. at 823. Subsection 17.50(b)(3) provides that a consumer may obtain “orders necessary to restore to any party to the suit any money or property, real or personal, which may have been acquired in violation of this subchapter.” Tex. Bus. & Com.Code § 17.50(b)(3). The consumer argued that section 17.50’s restoration remedy did not incorporate the common law principle of rescission, which necessarily includes mutual restitution. See Cruz,
Our analysis begins with Subchapter D’s text, which provides that a buyer’s remedy for the seller’s noncompliance with certain disclosure requirements is “to cancel and rescind the executory contract and receive a full, refund of all payments made to the seller.” See Tex. Prop.Code §§ 5.069(d)(2), .070(b)(2), .072(e)(2), .085(c)(2). As we recognized in Cruz, rescission is the common name for the composite remedy of rescission and restitution. Cruz,
The Nguyens and the dissent argue that the statutory scheme in Subchapter D compels a different result than that reached in Cruz. We disagree. Like the DTPA’s restoration remedy, Subchapter D’s cancellation-and-rescission remedy is not intended to be punitive — it merely provides the buyer, the- option of unwinding the transaction.
The dissent concludes that the statutory language “and receive a full refund of all payments made to the seller” evidences the Legislature’s intent not to incorporate the common law elements of rescission.
Because .the trial court did not consider the value of the Nguyens’ interim occupation of the property, we remand the case to the trial court to determine the Ngu-yens’ liability for the rental value of the property during their occupation.
III. Attorney’s Fees and Mental Anguish Damages
We turn next to Morton’s issue concerning the awards of attorney’s fees and mental anguish damages. Morton argues that the Nguyens are not entitled to either 'attorney’s fees or mental anguish damages because no claims supporting the awards survived the court of appeals’ judgment. We agree. The trial court found that Morton’s conduct violated various sections of Subchapter D and constituted statutory fraud in a real estate context. The trial court then utilized those findings to afford the Nguyens the maximum recovery by rendering judgment on the Subchapter D violations and- Finance Code violations, which included an award of $67,020 in attorney’s fees. On appeal, the court of appeals reversed the only two causes of action that supported an award of attorney’s fees — the claim for liquidated damages under section • 5.077 of the Property Code and the Finance Code claims. See
For similar reasons, we conclude that the court of appeals should have also reversed the award for mental anguish damages when it reversed the trial court’s judgment for damages under the Finance Code. Cf. Parkway,
IV. Conclusion
Accordingly, we grant Morton’s petition for review and, without hearing oral argument, Tex.R.App. P. 59. 1, we reverse the portion of the court of appeals’ judgment affirming the trial court’s awards of actual damages for cancellation and rescission, mental anguish damages, and attorney’s fees, and we remand the case to the trial court for proceedings consistent with this opinion.
Notes
. As recognized by the dissent, we have held that the liquidated damages provisions in sections 5.077 and 5.079 of Subchapter I) are indeed punitive.
. For example, if a retail store has a policy that entitles a buyer to a full refund for a defective product, surely no logical consumer would think that he or she is entitled to both the product and a refund of the price paid for the product simply because the policy entitles the consumer to a "full refund of the purchase price.”
. The court of appeals held that Morton waived the issue because he did not argue "that the trial court could not have awarded mental anguish damages in conjunction with [the Property Code] violations.”
Concurrence Opinion
joined by Justice WILLETT and Justice LEHRMANN, concurring in part and dissenting in part.
The Court is bothered that a literal application of Subchapter D of Chapter 5 of the Texas Property Code “result[s] in a windfall” to purchasers under an executory contract. Ante at 511. But our task here is to apply the statute as written, and it is not within our power or our role to resolve the Court’s concern. As the Court has said repeatedly, even quite recently:
• “The aim of statutory construction is to determine and give effect to the Legislature’s intentf.]” CHCA Woman’s Hosp., L.P. v. Lidji,403 S.W.3d 228 , 231 (Tex.2013);
• It is “cardinal law” that we begin with the plain language and common mean- . ing of the words in the statute. Traxler v. Entergy Gulf States, Inc.,376 S.W.3d 742 , 747 (Tex.2012);
• We “begin (and often end) with the Legislature’s chosen language,” Christus Health Gulf Coast v. Aetna, Inc.,397 S.W.3d 651 , 653 (Tex.2013), because “the truest manifestation of what lawmakers intended is what they enacted.” Combs v. Roark Amusement & Vending, L.P., — S.W.3d -, -,2013 WL 855737 , at *2 (Tex. March 8, 2013);
• The Legislature’s “voted-on language is what constitutes the law, and when a statute’s words are unambiguous and yield but one interpretation, ‘the judge’s inquiry is at an end.’ ” Id. (quoting Alex Sheshunoff Mgmt. Servs., L.P. v. Johnson,209 S.W.3d 644 , 651-52 (Tex.2006)); and
• “[Ujnambiguous text equals determinative text (barring an absurd result).” In re Office of Attorney Gen., — S.W.3d-,-,2013 WL 854785 , at *4 (Tex. Mar. 8, 2013).1 .
[Tjhere is no liberty if the powers of judging be not separated from the legislative and executive powers. Were it joined with the legislative, the life and liberty of the subject would be exposed to arbitrary control; for the judge would be the legislator. Were it joined to the executive power, the judge might behave with all the violence of the oppressor.
C. Montesquieu, The Spirit of Laws 202 (T. Nugent trans., D. Carrithers ed.1977) (T. Nugent trans. 1st ed. 1750).
In the present case, a majority of the Court holds that a purchaser’s recovery under Subchapter D of Chapter 5 of the Texas Property Code must be reduced by the value of the benefits the purchaser received from the seller. That may be good policy, but the Code repeatedly states that the purchaser is entitled to “receive a full refund of all payments made to the seller.” Tex. Prop.Code §§ 5.069(d)(2), 5.070(b)(2), 5.072(e)(2) (emphases added). Because I cannot join the Court’s holding without ignoring this language altogether, I respectfully dissent from this part of the Court’s opinion.
I.
Statutory Remedy under the Property Code
In Subchapter D of Chapter 5 of the Texas Property Code, the Legislature has provided that a seller’s failure to make certain disclosures before entering into an executory contract for conveyance of real property (i.e., a contract for deed)
entitles the purchaser to cancel and rescind the executory contract and receive a full refund of all payments made to the seller.
Tex. Prop.Code §§ 5.069(d)(2), 5.070(b)(2), 5.072(e)(2) (emphases added). The seller’s violation of yet another provision
entitles the purchaser to cancel and rescind the executory contract and receive from the seller:
(A) the return of all payments of any kind made to the seller under the contract; and
(B)reimbursement for:
(i) any payments the purchaser made to a taxing authority for the property; and
(ii) the value of any improvements made to the property by the purchaser.
Id. §§ 5.085(c)(2) (emphases added).
Despite this unambiguous language, the Court holds that a seller’s violation of these statutes does not entitle the purchaser to receive “a full refund of all payments made to the seller” or “the return of all payments of any kind made to the seller.”
A. No Punitive Purpose?
First, the Court asserts that its construction of the statute is appropriate because the statute’s “cancellation-and-rescission remedy is not intended to be punitive.” Ante at 511. Ignoring for a moment the lack of support for this assertion, and the precedent to the contrary, the best indication of what the Legislature intended is found in the words the Legislature chose. See, e.g., Combs, — S.W.3d at -,
In any event, the Court provides no support for its assertion that the Legislature does not intend .this statute’s remedies to be “punitive.”
Finally, even if the Legislature did not intend sections 5.069, 5.070, and 5.072 to be punitive in nature, I am not convinced that permitting recovery of “all payments made to the seller”'is inherently punitive. Although violation of these provisions constitutes a “false, misleading, or deceptive act or practice” under the Texas Deceptive Trade Practices-Consumer Protection Act (DTPA), see Tex. Prop.Code §§ 5.069(d)(1), 5.070(b)(1), 5.072(e)(1), some claimants entitled to recover under the Property Code will not also recover under the DTPA, as this case demonstrates. Claimants who, like the Nguyens, recover only under sections 5.069, 5.070, or 5.072 do not receive the benefit of the DTPA’s provisions for recovery of actual damages, much less the DTPA’s more punitive provisions.
Regardless of whether or how “punitive” the statute may be, I see no need to consider legislative history or to argue about the statute’s unstated “purpose” when its stated effect is clear. If the Legislature’s words are the “surest guide” to the Legislature’s intent, see Traxler,
B. “Rescind” Trumps All?
Second, the Court reasons that, by using the word “rescind,” the Legislature “intended Subchapter D’s cancellation-and-rescission remedy to also. contemplate the common law element of mutual restitution.” Ante at 511. I agree that, generally, we could presume that the Legislature knows and intends the common meaning of a word like “rescind,” but in construing this statute we “must give effect to every word, clause, and sentence” that the Legislature has used. In re Office of Attorney Gen., — S.W.3d at-,
If the Legislature had intended that the purchaser be entitled only to “the common law element of mutual restitution,” ante at 511, then the Legislature should (and, I must conclude, would) have ended these statutory provisions after the reference to the “executory contract,” omitting the phrase “and recéive a full refund of all payments made to the seller” completely. The Legislature did not omit that phrase, but the Court has done so for it. Because “every word or phrase in a statute is presumed to have been intentionally used with a meaning and a purpose,” In re Allen,
C. Cruz Controls?
Third, the Court relies — incorrectly, I believe — on Cruz v. Andrews Restoration, Inc.,
I do not agree that Cruz controls our decision in this case. The statute in Cruz authorized “restoration,” and not just to the consumer, but “to any party to the suit.” Tex. Bus. & Com.Code § 17.50(b)(3). By contrast, the statutes here dictate that the “purchaser ... receive a full refund of all payments made to the seller.” Tex. PROp.Code §§ 5.069(d)(2), 5.070(b)(2), 5.072(e)(2). And, more importantly, the statute in Cruz authorized restoration only of amounts “acquired in violation” of the statute. Tex. Bus. & Com.Code § 17.50(b)(3). By contrast, the statute here requires a “full refund of all payments made to the seller.” Tex. Prop.Code §§ 5.069(d)(2), 5.070(b)(2), 5.072(e)(2).
In short, the Court’s construction of the DTPA provision in Cruz may have been consistent with the language of that statute, but that same construction is not consistent with the entirely dissimilar language of the statute at issue here. Because .the Legislature’s language matters, our constructipn of very different statutory language in Cruz is of no help here.
D. “Rescind” doesn’t mean “rescission”?
Finally, the Court confirms its unwillingness to allow the language of the statute to control the outcome of this case when it concludes that “notice and restitution or a tender of restitution,” which are prerequisites to the common law remedy of rescission, “are not prerequisites to the cancellation-and-reseission remedy under Subchapter D, as long as the affirmative relief to the buyer can be reduced by (or made subject to) the buyer’s reciprocal obligation of restitution.” Ante at 511. In other words, having decided that the Legislature’s use of the word “rescind” justifies ignoring the statute’s refund-of-all-payments provision, the Court then concludes that, actually, the Legislature doesn’t really mean “rescind” or “rescission” at all. Instead, it means “restitution,” or what the Court calls “the common law element of mutual restitution.” Id. at 511. Surely, if that’s what the Legislature meant, it could have said so. In my view, the Court has at this point gone from interpreting a law to making a law, because it believes restitution is a proper remedy, but rescission (with its inconvenient notice and' tender prerequisites) is not. In doing so, the Court has demonstrated why its conclusion is wrong to begin with.
Conclusion
Our principles of statutory construction require the Court to focus on the Legislature’s words to determine the Legislature’s intent. We do this not because we agree with the Legislature’s policy choices — sometimes, we vigorously disagree — but because “[w]e must take the Legislature at its word, respect its policy choices, and resist revising a statute under the guise of interpreting it.” Christus Health Gulf Coast v. Aetna, Inc.,
I agree with the Court’s decision to reverse the Nguyens’ award of attorney’s fees and mental anguish damages, but I disagree that Morton is entitled to mutual restitution upon the rescission of the contract for deed. Because the Legislature has said that the Nguyen’s are entitled to' “a full refund of all payments made to the seller,” I respectfully concur in part and dissent in part.
. See also, e.g., Rachal v. Reitz,
. The Court states, "Like the [Texas Deceptive Trade Practices — Consumer Protection Act’s (DTPA)] restoration remedy, Subchapter D’s cancellation-and-rescission remedy is not intended to be punitive — it merely provides the buyer the option of unwinding the transaction,” citing Cruz v. Andrews Restoration, Inc.,
. Because the Nguyens did not recover under the DTPA, they could not seek an order under section 17.50(b)(3) — the provision at issue in Cruz. See Cruz,