Opinion ID: 1302079
Heading Depth: 1
Heading Rank: 8

Heading: Assessments and Lien Foreclosures.

Text: The covenant document authorized SVILA to levy annual assessments against all lots in the development except lots owned by [Patten] or any successor developer. SVILA used the assessments to finance the maintenance of the common areas, as well as other association activities. In its original findings, the district court found neither Clinton nor Sollars, individually or jointly, was a developer within the meaning of the covenant document. The court therefore found SVILA had acted appropriately when it levied assessments against the lots Clinton and Sollars owned individually. In its decree the district court (1) entered judgment against Clinton and Sollars for the past-due assessments they allegedly owed, and (2) foreclosed the liens for those assessments. The assessments amounted to approximately $18,000. Clinton and Sollars challenge the district court's finding that they were not developers. They contend Sky View was a successor developer under the covenant document. They further contend they, too, in their individual capacities, became successor developers. Clinton and Sollars point to the following record evidence to support their claim that they are developers. Sky View intended to build larger projects such as condominiums. Clinton and Sollars, on the other hand, intended to build spec houses on their individual lots. Clinton and Sollars purchased over a hundred lake lots from Sky View. They (1) mowed and staked their individual lots, (2) plowed snow from the roads in front of these lots, (3) cleaned out the old brush, (4) built spec homes, (5) reconstructed and graded roads, (6) entered into a dealership agreement for stick-built factory homes, and (7) advertised in local newspapers. We adopt the following district court findings on this issue: Neither [Clinton] nor Sollars, individually or jointly, is a developer within the meaning of the covenants. Conversely, Sky View is a developer. The covenants do not contemplate multiple developers. The vacant, unplatted ground belongs entirely to Sky View. [Clinton] and Sollars have taken title individually to various lots for the purpose of building and not for the purpose of further developing the subdivisions involved. Recognition of multiple developers would likely place on some of them obligations created by the covenants and transfer agreements which individually they simply could not meet because of their inability to control other developers. It is accordingly found that [the SVILA] has acted appropriately in levying assessments and foreclosing against the lots owned jointly and individually by [Clinton] and Sollars. We think the district court was correct for yet another reason. Only successor developers are exempt from assessments. The covenants do not define successor. According to one court, [t]he exact meaning of the word successor as applied to a contract must depend largely on the kind and character of the contract, its purposes and circumstances, and the context. As applied to corporations, successor does not ordinarily mean an assignee, but is normally used in respect to corporate entities, including corporations becoming invested with the rights and assuming the burdens of another corporation by amalgamation, consolidation, or duly authorized legal succession. The term successor has also been defined as one who takes the place that another has left, and sustains the like part or character. Enchanted Estates Comm. Assoc. v. Timberlake Improvement Dist., 832 S.W.2d 800, 802 (Tex.Ct.App.1992) (citations omitted) (emphasis added). We think the italicized definition of the term successor is what the parties intended successor to mean in the covenant document. Patten was responsible for the covenant document language. When it purchased the development from Quenton, Patten probably contemplated it might sell the development intact before ever completing it. Patten may have used the term successor developer to make any such potential sale more attractive by exempting the buyer from assessments against unsold lots. But it was Sky View, not Clinton and Sollars, that took the place of Patten as to the whole development when Patten left. And it was Sky View, not Clinton and Sollars, that sustain[ed] the like part or character Patten had relative to the whole development.