### TEXA S C OU R T OF A PPEAL S, THIR D DIST R ICT , AT AU STIN

444 444 444 444 444 444 444 444 444 ON MOTION F OR REHEARING

444 444 444 444 444 444 444 444 444 NO. 03-0 5 -00 194 -CV
Hug h Be adl e s , A ppe lla nt

v. Lago Vista P ropert y Ow ners Association, Inc. , Appellee

F ROM THE COUNTY COURT AT LAW NO. 1 OF TRAVIS COUNTY NO. 2790 22 , HO NORAB LE ORLI NDA NARAN JO , JUDGE PRESIDI NG

M E M O R

A N D U M O P I N I O N Hug h Be adles ha s filed a motion for r ehea ring . We withdraw our e arlier opinion and judgme nt, dated De cembe r 16, 2006, and substitute this opin ion. We overrule B eadle s’s
m o t i o nfo r r eh ea ri n g.

B e a dle s a pp e a ls the tr ia l c ourt ’s su mma ry jud g me nt in fa

vo r of L a g o V ist a

Pr op e rt y Owner s Association, I nc. (the Association), orde ring Be adles to pay proper ty asses s m en t s and attorney ’s fe es. B eadle s contends that the tria l court erred in determining that res judicata prec luded hi s af fi rm ative def

enses a nd counter claim. He f

urther a rg ues that his aff

irmative def

enses a nd counter claim wer e not bar red by limit ations. Finally , he conte nds that the summary judgme nt evidenc e pre sented by the Association wa s not competent. B eca use we hold that Be adles’s2

counter claim and a ffirmative defe nses ar e pre cluded by res judicat a and that the Association prese nted compete nt summary judgme nt evidence , we a ffirm.

BACK GR OUND This ca s e concerns a housingdevelopment in L ag o Vista that is gove rned a nd manag ed by the Association. The Association is a non-prof it corporation org anized under the laws of Texas and, ther efor e, must confor m with the r equire ments of the Te x as Non-Prof it Corporation Act (the Act). See Tex. Rev. Ci v. Stat. Ann. arts. 1396-1.01-1 1
. 0 2 (W est 2003 & Supp. 2006). Property owner s are require d to belong to the Association and mus t pay maintenanc e fe es asse ssed
on eac h lot. The Association has the a uthority to b u y an d maintain community amenities and
common are as. I n 1992, the Association’s board of direc tors amende d the proc edure s throug h which As so c ia tio n me mbe rs e le c t bo ard me mbe rs . B e fo re the a me ndme nts , me mbe rs we re g ive n on e vo te per lot owne d, but the 1992 amendments chang ed the voting structure to a per capita s t ru cture,
a llo wi ngon e vo te pe r m e mbe r, re g ard le ss o f h owmany lot s th e me mbe r o wn s. Be adles be g an buying lots in the area in 1996 and now owns more than four hundr ed lots that are subjec t to the A ssociation’s restric tive covena nts and assessments. He ref used fr om the be g inn i n g t o p ay t h e a s s e s s m e n t s , an d i n 2 0 0 0 th e A s s o c i a t i o n f i l e d s u i t t o r e c o v e r t he un pa id assessments for

y ear s 1996 throug h 2000. Rather than a nswer that suit, Be adles filed a decla ratory judgme nt suit, seeking a

decla ration that the assessments we re inva lid because the 1992 amendme nt to the voting struc ture was illega l and bec ause the restric tive covena nts did not allow the Association to char g e the fees. Specifica lly , Be adles arg ued that the per capita votingstructure was illeg al under the Act
. T h e As sociation took a def ault judgme nt ag ainst Be adles in its suit and then moved for3

summary judgme nt in B eadle s’s suit, asserting that his complaints were barr ed by limit ations, that the def ault judgme nt was re s judicata on Be adles’s claims, and that, as a matter of law, its ac tions
we re a llo we d und e r t

he re str ic tiv e c ov e na

nts . T he As so c iat io n also c ounte rc la ime d f or un pa id assessments for

2000 and 2001 and a

ttorney ’s fe es. The trial court g rante d the Association’s motion for summary

judgme nt and its counterc laim. Be ad l es appea led, ar g uing his c laims were not barre d as a matter of law , by limit ations, or throug h res judicata. Beadles v. L a g o Vista Prop. Owners Ass’n, Inc. , No. 03-02- 00228-CV, 2002 Tex. App. L EXI S 7940, at *3-4 (Te x . App.—Austin Nov. 7, 2 0 02, pet. denied) (n o t d es i gn ated f

or publication) ( “Be ad

le s I ” ). We a ff

ir me d th e tr ia l c ourt ’s jud g me nt, and in s o do ing , c on sid e re d B e a dle s’ s argume nts re la te d to the vo tin g str uc tur e , ob se rv ingthat he bo ug ht h is lots afte r t he voti ng structure was amended and that he had at l east constructive notice of the voting structure
. Id . at *8-9. W e ad d resse d, albeit brief ly , his arg ument that the Association’s e ntire structure was illeg al under the Act and, thus , eac h vote taken w as an ong oing violation of la w that defe ated the r

unning of limit ations and conc luded that the Ac t did not ba r per capita voting. Id
. We he ld t hat, h a vin g e xami ne d th e Ac t, B e a dle s’ s a rg um ent that th e Ac t do e s n ot p e rm it p e r c a pit a
vo tin g wa s “ wi tho ut me ri t,” and that “ [a]n y c omp la int

re g ard ingthe c ha

ng e in v oti ngpr oc e dure s, there fore , arose from the pr ocedur e of a mending and p u b l i s h i n g them, which took place in 1992, more than f

our y ear s befor e [Bea dles] brought his complaint.” Id . at *9. After our dec ision in Be ad

le s I , Be adles c ontinue d t o asser t that the Association’s
vo tin g str uc tur e is i lle g a l and

vio la te s the Ac t. He a lso re fu se d to pa y a sse ssm e nts ma de a g a ins t hi s pr op e rt ie s in

20 02 , 200 3, and

20 04 . In 2 00 4, the As so c ia tio n f ile d s uit to c oll e c t th os e un

pa idThe motion for summary judgme nt, response to the motion, and the parties’ appellate briefs 1 all state that B eadle s asserte d a countercla im seeking a dec laration that the Association lacke d authority to assess h i s p ro p erty

and wa s illega lly

elec ted and c onstitut ed. Howe ver, B eadle s’s orig inal answe r does not as s er t a countercla im, but ins tead only asser ts those arguments as aff irmative defe nses. Be cause this issue does not a ffe ct our discussion, we will proce ed under the pr e su mpt ion

tha t B e a dle s d id i n f

a c t a sse rt a c ounte rc la im. 4 assessments, as we ll as late cha rg es, intere s t, and attorne y ’s fe es, stating that it had secur ed the unpaid assessments by

a lien. B eadle s answer ed with a c ounterc laim for dec laratory re lief and
a sse rt e d a ff

ir ma tiv e de fe ns e s, a g a in c on te nd ingthat th e As so c ia tio n w a s ill e g a lly c on sti tut e d d ue to the vo tin g str

uc tur e and

thu s la c ke d a

uth or ity to m a ke the a sse ssm e nts
. The Assoc iation filed a 1 mot ion fo r s umm ary

jud g me nt, arguin g that Be a dle s’ s a ff ir ma tiv e de fe ns e s and

c ounte rc la im, a ll based on the alleg ed illeg ality of the per capita voting struc ture, we re ba rre d by res judicata and the statute of limitations. The trial court gr anted the A ssociation’s motion for summary judgme nt wit h o u t s p ec i fy ing the g rounds on which judg ment was g rante d and orde red B eadle s to pay the assessments, intere st, and attorney ’s fe es.

DI SCU SSIO N As a pre liminary

matter, the A ssoci at i on filed an a ffidavit stating that Be adles ha s paid the judg ment in f

ull a nd contending that beca

use Be adles has completely satisfied his judgme nt debt, the appe al should be dis missed as moot. Bea dles contends that the pa y ment was made under pr ote st, so the a

pp e a l is no t moot
. Th e re is a dis pu te in t

he a ff ida vit s p re se nte d b y

the pa rt ie s a s to wh e the r B e a dle s e xpre sse d a n int ent to p ro c e e d w ithhis a pp e a l a t th e tim e he pa id t he jud g me nt. I n h is re sp on se to the As so c iatio n’ s motio n to dismi ss, B e a dle s e xpla ins that he wa nte d to se ll s ome of his proper

ty under the Association’s li en and there fore had to pay the judg ment to clear

title for5

the sale. He attache d an aff idavit by his attorney aver ring that befor e the Association ac ce p ted Be adles’s pay

ment, the attorne y

told the Association’s attorne y that Be adles ha d tender ed pay ment under pr otest and for

the sole purpose of cle aringtitle in order to sell the prope rty
. I n response , the As so c ia tio n’ s atto rn e y

a ve rr e d th a t “ [p]r ior

to r e c e ivi ng [B e a dle s’ s] c he c ks , I ha d n o d isc us sio n w ith Hug h Be adles or a

ny repr esentative of Hug h Be adles with r eg ard to the pay ment of the outstanding J udg ment.” Rather

than par sing the details of timing or deciding betwee n competing aff idavits, we will follow the rule stated by the supreme court in Miga v. J ensen , th a t “pa

y me nt on a j ud g me nt w ill not moot an a

ppeal of that judgme nt if the judgme nt de btor clea rly expresses an intent that he intends to exercise his rig ht of appe al.” 96 S.W .3d 207, 212 (Tex. 2002). We will consider the mer its of B e a dle s’ s is su e s and

we ov e rr ule the As so c ia tio n’ s mo tio n to dis mis s. B e a dle s r a ise s f

our i ssu e s o n a

pp e a l. H e c ontends that th e tr ia l c ourt e rr e d in deter mining that his aff

irmative def

enses a nd counter claim wer e pre cluded by res judicata or ba rre d by lim ita t i o n s a n d i n d e t e r m i n i n g that th e As so c ia

tio n’ s summa

ry jud g me nt e vid e nc e wa s c omp e te nt. We will address ea ch in turn.

Res Judicata B e a d le s c o n te n d s th a t t h e tria l court could not prope rly have g rante d the Association’s mot ion fo r s umm a

ry jud g me nt o n th e ba sis that th is C ourt ’s deci si on inBeadles I prec luded considerat i o n of his aff

irmative def

enses a nd counter claim under

res judicata. He c laims that res judicata does not a

pply beca use (1) any statement by

this Court i n Beadles I re g ard ingthe le g a lity of the Assoc iation’s voting structure wa s merely dicta, (2) the leg ality

of the voting structure was not6

actua lly litigated, and (3) the claims at issue in this cause do not arise f rom the same tr ansac tion as those alre ady

litigated.

“ Re s ju dic a ta ” is u se d to re fe r to “r e la te d co nc e pts c on c e rn ingthe c on c lus ive e ff e c ts g ive n f ina l ju dg me nts ,” and

“ [w]ithin

this general do c tr ine , th e re are tw o p ri nc ipa l c a te g or ie s: (1) c laim prec lusion (also known as res judicata) ; a nd (2) issue prec lusion (also known as collate ral estoppel).” Barr v. Resolution Trust Corp. , 8 3 7 S
. W
. 2 d 6 2 7 , 6 2 8 (T ex . 1 9 9 2 ) ( ci t i n g Puga v. Donna Fruit Co. , 634 S.W .2d 677, 679 (Tex. 1982)). Claim prec lusion bars the relitig ation of claims that have be en fina lly adjudicate d or shoul d have been litigated in an ea rlier suit. Id . I ssue pre clusion bars the r elitigation of “par ticular issues alre ady resolved in a prior suit.” Id . Res judicata ba rs later lit ig a tio n if

the re is a pr ior fi na l ju dg me nt o n the me ri ts by a c ourt of c omp e te nt j ur isd ic tio n, ide nti ty of par ties or those in privity with the m, and the later action is based on the same c laims that were or could have been raised in the first ac tion. Se e Coa lit ion of Citi es fo r A ffo rd ab le Ut il. Ra te

s v . P ub lic Util. Comm’n , 79 8 S.W. 2d 56 0, 56 3 ( Te x. 19 90 ); Texas W ater Rights Comm’n v. Crow Iron W orks , 582 S.W .2d 768, 771-72 (Te x . 1979).

We first ad dress whe ther this Court’s consideration of the Association’s voting st ructure inBeadles I can be reg arde d as a judg ment on the merits. Be ad le s I w a s a d e c lara tory jud g me nt a c tio n in wh ic h B e a dle s c ha lle ng e d th e sc op e of the As so c ia tio n’ s d isc re tio na ry a uth or ity
and a sse rt e d th a t th e As so c ia tio n’ s p e r ca pit a vo tin g str

uc tur e wa s ille g a l and

inv a lid un de r t he Ac t, the same a

rg uments Be adles ra ises in this cause . 2002 Tex. App. L EXI S 7940, at *1. This Court stated, “B eadle s broug ht this decla ratory judgme nt a ction in lieu of re sponding to the A ssociation’s collection suit for the 1996- 2000 maintenanc e fe e asse ssment.” I n addre ssing Be adles’s de clar atoryO n r e h e ar in g , B e a d le s ar g u e s th a t th e Court in Bea dl es I “did not make a

ny decision 2 reg ardingthe leg ality

of the by -laws amendment stripping me mbers o f t he rig ht to vote.” See Beadles v . Lago Vista Prop. Owners Ass’n, Inc

. , No. 03-02-00228- CV, 2002 Tex. App. L EXI S 7940 (T e x. Ap p. —A us tin

No v. 7, 20 02 , p e t. d e nie d) (n ot d e sig nate d f or pu bli c a tio n) . H ow e ve r, he a lso asser ts that this Court’s statement that “[h] aving examined the statute, we f ind this arg ument [t hat the Non-Prof

it Corporations A ct does not pe rmit pe r ca pita voting] to be without merit,” id . at *9, was “ totally

unnece ssary .” In Be ad

le s I , we held that any

complaints relate d to the voting pr ocedur es amendment “arose from the proce dure of amendingand publishing the m” and we re time-ba rre d. Id
. Our c onclusion that a per

capita votingmecha

nism is not illega l under the A ct was a n essential par

t of our de termination that Be adles’s c omplaints related to the amendment and the pr ocedur e employ ed in passing it were barr ed by limit ations. Se e id . I n this case, B eadle s ag ain complains that the amendme nt was illeg al, a c omplaint we disposed of in Be ad le s I
. Se e id
. 7 jud g me nt a c tio n, thi s Co ur t tw ic e up he ld t

he va lid ity

of the As so c ia tio n’ s v oti ngstr uc tur e , a nd in both instances this determination wa s nece ssary to our conc lusions. Id. at *9, *22. I n the ea rlier suit, Be adles a

rg ued that bec ause the per c apita voting structure was illega l, eac h vote under the invalid voting proc edure was pa rt of an on- g oing br eac h that tolled the running of limit ations. Id. at *8. Addre ssing this argument require d a determination of whe ther the Act permits per c apita voting , and we held that it did. Id. at *9 (B eadle s maintained “that the NonPr of it Cor po ratio ns Ac t do e s n ot p e rm it pe r c ap ita vo tin g . H a vin g e xami ne d th e statut e , w e fi nd thi s argument to be without mer it.”). We he ld, the ref ore, that any complaint reg ardingt h e v o t ing str uctur e aro se fr om t

he a me ndme nt o f t

he As so c ia tio n’ s v oti ngpr oc e dure s, wh ic h to ok pla c e in 1992, more than f

our y ear s befor e the action was brought, and so the statute of limitations barred the claim. Id. I f t

his Court ha d d e te rm ine d th a t th e vo tin gpr oc e dure s w e re no t a llo we d und e r t he Ac t, we would have had to a ddress B eadle s’s claim of a conti n u i n g b re ach that would have tolled the statut e of lim itatio ns . O ur

de te rm inatio n th a t th e Ac t a llo ws pe r capit a vo ti ng ans we rs the same argument asser

ted by Be adles in the cause befor e us now and wa s nece ssary to our holding that the statut e of lim itatio ns ba

rr e d B e a dle s’ s c la im. 28 This Court also briefly

considere d the validity

of the voting st ru cture when we
a dd re sse d Be a dle s’ s af

fi rm a tiv e de fe ns e to t

he As so c ia tio n’ s c ounte rc la im f or un pa id a sse ssm e nts
. Id . at *22. We stated that we had alre ady addre ssed the leg ality

of the Assoc iation’s voting struc ture and “r esolved these issues ag ainst Be adles” and aff irmed the awa

rd of a ssessments and attorne y ’s fee s. Id. I t was nec essar

y for the Court to determine that the Act allows pe r ca pita voting to af

firm the judg ment of the district cour t. Be adles contends that beca use the trial c ourt in Beadles I g rante d summary judgme nt in favor of the Association based on statute of limitations grounds, it did not consider whe ther the Association’s voti ng structure complied wit h the Act. There fore , he ar g ues that his claim was not
a c tua lly lit ig a te d. Ho we ve r, re g ard le ss o f t he tr ia l c ourt ’s de c isi on , B e a dle s h a d a fu ll o pp or

tun ity to brief a nd litigate the Association’s voting structure in this Court on t hat appe al. As we explained
a bo ve , w e de te rm ine d th a t th e As so c ia tio n’ s v oti ngstr uc tur e wa s v a lid

a ft e r f ull bri efi ng by

bo th parties. We conc lude that the issue wa s actua lly litigated. Be adles c laims that res judicata does not bar his cl ai ms beca use the unde rly ing transac tion in Be ad

le s I was the f

ailure to pa

y assessments fo r the y ear s 1996-2000 while the
u n d e r ly in g tr an s a c ti o nf

o r th is s u it is th e f a il u r e to p ay

th e 2 0 0 2 , 2 0 0 3 , an d 2 0 0 4 a s s e s s me n ts
. We disag ree . We considere d in Be ad le s I the same a

rg ument raised by

Be adles in this cause , asking whether the Act ba

rs the Association’s per c apita voti ng structure and holdi ng that it does not. Id
. at *9, *22. Our pr ior opinion inquired into and require d a dete rmination of the validit y of the Association’s per

capita votingstructure , and both ac tions invol ve the same parties. There fore , res judicata a pplies to bar B eadle s’s claims. We overr ule B eadle s’s first issue on appe al.9

St at ut e of Lim it at ion s

I n h i s first and sec ond issues, Be adles c ontends that his affir mative def

enses a nd counter claim ar e not bar

red by the statute of limit ations. Be adles a rg ues that statutes of limitations g ener ally do not apply

to affir mative def

enses. See V

i llages of Greenbriar v. Torres , 874 S.W .2d 259, 266 (Tex. App.—Houston [1s t Dist.] 1994, writ denied)
. He also asser ts that the assessments and the Association’s lien on his pr operty cre ated a cloud on the title to his property and that hi s c la im is no t tim e -b arr e d be c a us e a c a us e of a c tio n b a se d o n a

c lou d o n ti tle to r e a l e state is not barre d by

limit ations as long as the c loud exi sts. Se e Te x as Co. v . D av is , 254 S.W . 304, 309 (Tex. 1923).

I t is unnecessa

ry for us to decide these a

rg uments. When a trial cour t gr ants summary judgme nt without specifying the basis for its judg ment, the appealing party must show that each g round asse rt ed in the motion for summary judgme nt is insufficient to support the trial court’ s decision. Star-Telegram, Inc . v. Doe , 915 S.W .2d 471, 473 (Tex. 1995) . We will affirm a summar y judgme nt if it is s upported by any one of the movant’s theorie s. Id . Her e, t h e t ri al co urt did not sp e c if y wh e the r su mma

ry jud g me nt wa s g ra

nte d on the ba sis of re s ju dic a ta or lim itatio ns . B e c a

us e we have held that B eadle s’s claims ar e bar red by res j u d i cata , we ne ed not deter mine whether

the trial court co u l d h av e g rante d summary judgme nt on limi tations gr ounds. We overrule Be adles’s first and sec ond issues.

Com petent Sum m ary Judgm ent Evidence

I n h is f in a l i s s u e , B e a d le s c la im s th a t t h e A s s o c iati o nd id

n o t p r o d u c e c ompetent evidenc e in suppor

t of its summ ary

judgme nt motion. S pecif ically , he conte nds that the evidenc e10

does not show that the asse ssments were authorize d b y t h e ap p ropriate authority , arguing that the Association was not a

uthorized to make assessments beca use its e lections did not comply with the Act. The ref

ore, he asser

ts, th e af

fi d avit’s identifications of the amounts owed a re
on ly le g a l c on c lus ion s.

We reviewthe trial cour t’s g rant of summar

y ju d g ment de novo, indulg ing presumptions and re solving doubts in favor of the non-mova

nt, and t aking evidenc e as true evidenc e fa vo ra ble to t he no n- mov ant. J

oe v . Two T

hi rt y Nin e J oin t V e ntu re , 145 S.W .3d 150, 156 (Tex. 2004). To pre vail on a sum mary judgme nt motion, the m ovant m ust offe r admissible evidenc e proving that no g enuine issue of materia l fac t exis ts and that the m ovant i s entitled to judgment a s
a ma tte r o f l aw. Te x. R. C iv. P
. 16 6a(c ). A le g a l c on c lus ion is i ns uf fi c ie nt t o e sta

bli shfa c ts t o support a motion for summary judgme nt. Brownlee v. Brownlee , 665 S.W .2d 111, 112 (Tex. 1984). Be adles admits that his lots are subject to rec orded r estrictive c ovenants that re quire him to be a member

of the Assoc iation. He does not de ny th e Association’s author ity to collect assessments ag ainst him if its vot ing struc ture is in compliance with the Act. He claims only that the Association is not authorized to make assessments be cause its elections violate the Ac t. Be fore the tri al co u rt considere d the Association’s motion, this Court had alrea dy deter mined that the Association’s ele ctions did not viol ate the A ct. Se e Be ad le s I , 2002 Tex. App. L EXI S 7940, at *9. There fore , the evidenc e provide d by the Association did not amount to mere le g al conc lusions but instead wa s competent summary judgme nt evidence to prove the sums ac crue d over the y ear s. The As so c ia tio n p ro vid e d s uf fi c ie nt evi den c e to s up po rt its su mma

ry jud g me nt m oti on . We ov e rr ule Be adles’s f

ourth issue.11 CO NC LU SION Havingoverr

uled all of B eadle s’s issues on appea l, we af fi r m t h e tria l c o u

r t’ s gr anting of su mma ry jud g me nt.

__________________________________________ David Pury ear , J ustice
Be fore J ustices Patterson, Pury ear and B . A. Smith* Affir med on Motion for Rehea ring Filed: May

18, 2007

* Be fore Be a Ann Smith, J ustice (r etired) , Thi rd C o u rt of Appe als, sitting by assig nment. See Tex. Gov’t Code Ann. § 74.003(b) ( West 1998).