No. 03-14-00660-CV 

In The Court of Appeals For the Third 

District of Texas at Austin

CRAIG ZGABAY AND TAMMY ZGABAY,

Appellants,

v.

NBRC PROPERTY OWNERS ASSOCIATION,

Appellee.

On Appeal from the 433rd District 

Court of Comal County, Texas

Trial Court Cause No. C2014-0501C

AMENDED REPLY BRIEF OF APPELLANTS

J. Patrick Sutton

SBOT 24058143

1706 W. 10th Street

Austin Texas 78703

Tel. (512) 417-5903

Fax. (512) 355-4155

jpatricksutton@jpatricksuttonlaw.com

Counsel for Appellants

February 5, 2015

ACCEPTED

03-14-00660-CV

4034632

THIRD COURT OF APPEALS

AUSTIN, TEXAS

2/5/2015 11:53:54 AM

JEFFREY D. KYLE

CLERK

 RECEIVED IN 3rd COURT OF APPEALS AUSTIN, TEXAS 2/5/2015 11:53:54 AM JEFFREY D. KYLE Clerk
ii

TABLE OF CONTENTS

INTRODUCTION....................................................................................... 1

FACTS IN REPLY...................................................................................... 3

ARGUMENT AND AUTHORITIES.......................................................... 4

I. "Single family" does not restrict or relate to serial residency, 

occupancy, or leases................................................................................. 4

II. Multi-owner homes are equivalent to STR’s ................................... 6

III. The Zgabays didn't waive the owner-occupancy argument.......... 7

IV. The meaning of the injunction is the problem ............................... 9

CONCLUSION ......................................................................................... 11

CERTIFICATE OF SERVICE ................................................................. 12

CERTIFICATE OF COMPLIANCE ........................................................ 12

INDEX OF AUTHORITIES

Cases

Benard v. Humble, 990 S.W.2d 929 (Tex. App.—Beaumont 1999, 

pet. denied)........................................................................................... 11

McConnell v. Southside Indep. Sch. Dist., 858 S.W.2d 337 (Tex. 

1993) .................................................................................................... 7, 8

Vaughn v. Drennon, 202 S.W.3d 308 (Tex. App.-Tyler 2006) ......... 10

Wilmoth v. Wilcox, 734 S.W.2d 656 (Tex. 1987).................................. 1

Statutes and Rules

Tex. Bus. Orgs. Code § 101.052.............................................................. 6

Tex. Prop. Code § 92.010 ......................................................................... 6

Other Authorities

NBRC POA DCCRs, Draft 2015-1-21 .................................................... 3
1

INTRODUCTION

Homebuyers buy into restrictive covenants. Buyers have 

many choices; the variety of restrictive covenants is endless. See, 

e.g., Wilmoth v. Wilcox, 734 S.W.2d 656, 658 (Tex. 1987) ("[J.B. 

Overturf], his brother and a surveyor named Hodges sat around 

the table and created the restrictions"). And the restrictions can 

always be found and read in the county records. 

Some restrictive covenants clearly and unambiguously limit 

the duration of leasing so that anyone can comprehend the

limitations on their property rights. CR43, 46-47. Some restrictive 

covenants regulate leasing little if at all. That is the case here, 

where the covenants do not differentiate leasing and ownerresidency apart from a brief mention of signage. And though the 

restrictive covenants in this case do address duration issues in 

some residency-related contexts, they do not do so as regards

leasing. Appendix 0016, 0018. 

The HOA and the Zgabays are in accord that the restrictive 

covenants are clear and unambiguous, but the HOA's takeaway is 

that the conspicuous omissions restrict the Zgabays' leasing rights.

Furthermore, that the conspicuous omissions impose, very 

precisely, a minimum duration, not a maximum duration; that the
2

minimum duration has no fixed number; and that the minimum 

duration applies to tenant "residents" but not to owner "residents."

In the HOA's view, not only the complete absence, but even the 

conspicuous omission of lease duration restrictions, must be 

interpreted against property owners.

The HOA never does address the profound question at the 

heart of this case: How could the Zgabays or anyone else know that 

the complete and conspicuous absence of duration limits equates to 

a ban on leasing (but not owner residency) for some undefined 

minimum term? Restrictive covenants exist for precisely the 

purpose of telling people in readily comprehensible terms what 

they can and cannot do with their land. Their land. 

And restrictive covenants can readily be amended to redefine

all the use parameters, according to the collective democratic will 

of the owners. All the HOA in this case had to do was get together 

a community vote on the issue of short-term rentals. Instead its 

board, acting alone, prestidigitated something from nothing and 

declared it the law.
3

FACTS IN REPLY

The record does not support the HOA's assertion that the 

Zgabays did not read the restrictive covenants at all until after 

they purchased. Brief of HOA at 1. Mr. Zgabay testified merely 

that long after he bought his land and built a house on it, he read 

the restrictive covenants concerning leasing restrictions. CR50.

Short-term rentals via the web didn't exist when the Zgabays 

bought their land in 2000.

The Zgabays moved below to strike the HOA's affidavits 

concerning alleged misbehavior by tenants, and the Zgabays

submitted evidence rebutting the HOA's allegations. CR104-105, 

CR112.

The Zgabays ask this Court to take judicial notice of the fact 

that the HOA in January, 2015, published on its website draft 

amendments to the restrictive covenants that would bar rentals 

with a duration of 30 days or less. NBRC POA DCCRs, Draft 2015-

1-21 §§ 1.12(e), 3.16.1 The various documents published on the site

establish that it is the HOA itself, not a third party, that is 

making the proposal. In addition, all indications on the nonpassword-protected web page are that the Appellee owns and is 

 1 Accessed Feb. 4, 2015, at: 

http://riverchasepoa.org/river_chase_poa_ee/index.php?/riverchase/home_page/
4

responsible for the content therein and intends to disseminate the 

information broadly. In addition, the Whois record for 

http://riverchasepoa.org indicates that the Appellee in this case is, 

in fact, the registrant for the website in question.2 Finally, 

meeting minutes published therein reference "the current lawsuit" 

and that amendments to the restrictive covenants are intended "to 

clarify short-term rental language in the DCCRs," a clear reference 

to this case.3 The Zgabays offer this fact to show that drafters of 

restrictive covenants can and do employ specific numbers to denote 

minimum allowed rental durations so that everyone is clear what 

is intended.

ARGUMENT AND AUTHORITIES

I. "Single family" does not restrict or relate to serial 

residency, occupancy, or leases

The HOA asserts in two places that "[e]ntering into a series 

of short-term rentals with separate families (or other groups) is 

not a 'single family' use." Brief of HOA at 12, 14. That is 

preposterous. Investor-owners always engage in serial leasing, 

whether for days, weeks, months, years, or decades at a time. 

 2 Accessed Feb. 5, 2014, at: http://whois.domaintools.com/riverchasepoa.org

3 Accessed Feb. 5, 2015, at:

http://riverchasepoa.org/river_chase_poa_ee/images/riverchase/2015_01_12_BOD_m

tg.pdf
5

Some people purchase shares in properties precisely for serial 

short-term use on the part of multiple owners, and that's 

functionally equivalent to serial leases. The HOA's argument

demands the conclusion that once someone has purchased a home 

and lived in it, they can never lease it to someone else; or having 

leased it out once, they can never lease it out again. The HOA has 

focused very narrowly on one fact pattern -- the owner-occupied, 

one-owner subdivision dwelling not even implicated by this case -

- without taking into account the many ways in which property is 

owned and used. Based on one narrow conception of "use" that is 

nowhere accorded special status in the restrictive covenants 

themselves, the HOA would literally limit a home’s use to one

single family!

This points up, again, how the HOA shies away from

explaining how a point on the timeline changes the character of 

an ordinary family’s use of a dwelling for sleeping, eating, 

brushing teeth, and watching the Super Bowl. Some deed 

restrictions do declare a duration marker. Even the HOA's 

proposed restrictions contain a clear minimum duration. The 

current deed restrictions simply do not, and that is the crux of 

this case.
6

II. Multi-owner homes are equivalent to STR’s

Any number of unrelated persons can be co-owners of a 

home. Multiple owners can divvy up the time shares into small 

increments. That can be accomplished formally by placing 

ownership in an LLC, then using a detailed company agreement 

to set out co-owners’ time-shares. The company agreement can 

even permit shares to be transferred or conveyed. See generally, 

Tex. Bus. Orgs. Code § 101.052.

Texas law restricts the maximum occupancy of leased homes 

but not owner-occupied homes. Tex. Prop. Code § 92.010 (3 adults 

per bedroom).

There is no functional difference between LLC-owned homes 

with time-sharing co-owners and one-owner homes leased serially

to different tenants. Different paperwork is involved, but from 

the perspective of a neighbor with concerns about traffic, 

maximum occupancy, noise, or any other aspect of the human 

incidents of dwelling-house habitation, both legal arrangements 

involve a succession of different families moving in and out for 

short terms in a furnished home. In the case of the home with 

many owners, there does not even appear to be a statutory 

occupancy limit as there is for a leased home, making the 

arrangement potentially worse from a neighbor's perspective. The 
7

problem with all the HOA’s arguments in this case is that they

depend upon a distinction between tenants and owners that the 

restrictive covenants do not support. There are many legal ways 

to address the problems caused by bothersome neighbors, 

whether owners or tenants, but torturing the restrictive

covenants is not one of them.

III. The Zgabays didn't waive the owner-occupancy 

argument

The HOA contends it didn't get fair notice from the Zgabays' 

motion for summary judgment of the Zgabays’ contention that the 

restrictive covenants do not bar short-term rentals. Brief of HOA

at 13. But there was no brief apart from the motion in this case, 

which is the issue dealt with in the McConnell decision the HOA 

cites. See McConnell v. Southside Indep. Sch. Dist., 858 S.W.2d 

337, 338 (Tex. 1993) ("This case presents the question whether 

grounds for summary judgment must be expressly presented in 

the motion for summary judgment itself or whether such grounds 

may be presented in . . . a brief filed contemporaneously with the 

motion."). Furthermore, the HOA filed a motion for summary 

judgment involving all the same issues.

In any event, McConnell requires a party to “address the 

cause of action” in a meaningful way so as to give fair notice what 
8

grounds a party is asserting. 858 S.W.2d at 340 (internal citation 

omitted). The grounds for the Zgabays’ case has always been that 

the restrictive covenants do not impose duration limits on 

leasing. Their motion for summary judgment argues their cause 

of action for a declaratory judgment as to the meaning of the 

restrictive covenants. It strains credulity for the HOA to assert it 

was confused what the Zgabays were contending, which is the 

rationale behind the rule in McConnell. Id. at 343-44. The parties 

vigorously argued their respective mirror-image DJ claims in the 

motions and hearing below.

There is no authority that a summary judgment motion 

must refine every argument of counsel to the nth degree or 

anticipate every conclusion the trial court might draw from the 

parties' arguments. If that were so, then decisive arguments 

made at hearing would be waived merely because there was no 

reporter’s record. 

The Zgabays raised the owner-occupancy issue in their 

response to the HOA's cross-motion, if not developed to the 

degree it has been on appeal. CR104. They also argued at length 

that the restrictive covenants contain no duration limits, and 

their arguments on appeal are extensions of those and, more 
9

fundamentally, stem from the same few words in the contract 

that have consistently been the basis for contention. The 

arguments the Zgabays honed for this appeal arise as well from 

the trial court's order, which either does or does not contain the

errors in logic and contract interpretation the Zgabays have 

asserted. As a general proposition, it would hamstring lawyers if 

they were not allowed to refine and extend on appeal the 

arguments made at the trial court level. That is particularly true 

here, where the bone of contention has always been, both below 

and on appeal, the meaning of the contract on a narrow issue in 

contention (whether short-term rentals are a residential use), 

and where the record plainly demonstrates extensive argument

below on an important issue of law for which there is no clear 

appellate precedent.

IV. The meaning of the injunction is the problem

The Zgabays have not asserted that the “reasons” for the 

injunction aren’t clear. Brief of HOA at 18. They are: the trial 

court agreed with the HOA that short-term rentals violate the 

restrictive covenants. It’s the vagueness of the injunction that’s 

objectionable. A permanent injunction “must be definite, clear, 

and concise, leaving the person enjoined in no doubt about his 
10

duties, and should not be such as would call on him for 

interpretations, inferences, or conclusions.” Vaughn v. Drennon, 

202 S.W.3d 308, 316 (Tex. App.-Tyler 2006). The Vaughan court 

invalidated a permanent injunction because it “[was] not clear 

and [did] not contain sufficient detail for the Vaughns to 

determine exactly what the court want[ed] them to do.” Id. at 

317. 

The injunction in this case is not clear and does not contain 

sufficient detail for the Zgabays to determine exactly what the 

trial court wants them to do. Many restrictive covenants and 

local ordinances provide a numerical definition for minimum 

rental terms because owners need certainty how to avoid onerous 

legal consequences. The HOA's own draft amendments to the 

restrictive covenants make the proposed minimum rental 

duration clear. Undersigned counsel has litigated cases where the 

owners in the HOA mooted the STR dispute mid-stream by 

amending the restrictive covenants to impose a specific minimum 

duration for rentals. The restrictive covenants in this case are 

full of specific numerical deadlines for various things, just not 

leases. Even the Benard decision that the HOA relies upon says 

90 days, which at least has the virtue of clarity. Benard v. 
11

Humble, 990 S.W.2d 929 (Tex. App.—Beaumont 1999, pet. 

denied).

The Zgabays urge this court, if it concludes that typical, 

bare-bones “residential use” wording in and of itself bars shortterm rentals, to give clear guidance to the many property owners

around the state who stand to be affected.

CONCLUSION

HOA’s are, in effect, local-local government that subdivision 

owners control. Restrictive covenants are mini-Constitutions that 

owners pay money to live under. Courts that substitute their views

for those of the subdivision homeowners acting collectively do a 

disservice to those people and their local-local democratic 

processes.

Respectfully submitted,

/s/ JPS

J. Patrick Sutton

Texas Bar No. 24058143

1706 W. 10th Street

Austin Texas 78703

Tel. (512) 417-5903

Fax. (512) 355-4155

jpatricksutton@

jpatricksuttonlaw.com

Attorney for Appellants
12

CERTIFICATE OF SERVICE

I certify that on February 5, 2015, per T.R.A.P. 6.3(b), a true 

and correct copy of this amended brief was served by efiling and 

email on:

Tom Newton

Allen Stein & Durbin, P.C.

6243 IH-10 West, 7th Floor

San Antonio, Texas 78201

TNewton@ASDH.com

Brian Hensley

Thompson, Coe, Cousins & Irons, L.L.P.

701 Brazos, Suite 1500

Austin, Texas 78701

Ph (512) 708-8200 

Fax (512) 708-8777

BHensley@thompsoncoe.com

/s/ J. Patrick Sutton 

Attorney for Plaintiffs-Appellants 

CERTIFICATE OF COMPLIANCE

This document complies with the typeface requirements of Tex. R. 

App. P. 9.4(e) because it has been prepared in Century Schoolbook 

14-point for text and 12-point for footnotes. Spacing is expanded 

by .6 point for clarity. This document also complies with the wordcount limitations of Tex. R. App. P. 9.4(i), if applicable, because it 

contains 2075 words, excluding any parts exempted by Tex. R. 

App. P. 9.4(i)(1).

/s/ J. Patrick Sutton 

Attorney for Appellants