Court Opinion

ID: 2870652
Source: CourtListenerOpinion
Date Created: 2015-09-06 03:50:47.220118+00
Date Added: 2024-06-11T11:35:11.594301
License: Public Domain

TEXAS COURT OF APPEALS, THIRD DISTRICT, AT AUSTIN

                                      NO. 03-05-00194-CV

                                    Hugh Beadles, Appellant

                                                 v.

                   Lago Vista Property Owners Association, Inc., Appellee

            FROM THE COUNTY COURT AT LAW NO. 1 OF TRAVIS COUNTY
            NO. 279022, HONORABLE ORLINDA NARANJO, JUDGE PRESIDING

                            MEMORANDUM OPINION

               Hugh Beadles appeals the trial court’s summary judgment in favor of Lago Vista

Property Owners Association, Inc. (the Association), ordering Beadles to pay property assessments

and attorney’s fees. Beadles contends that the trial court erred in determining that res judicata

precluded his affirmative defenses and counterclaim. He further argues that his affirmative defenses

and counterclaim were not barred by limitations. Finally, he contends that the summary judgment

evidence presented by the Association was not competent. Because we hold that Beadles’s

counterclaim and affirmative defenses are precluded by res judicata and that the Association

presented competent summary judgment evidence, we affirm.

                                        BACKGROUND

               Beadles owns more than four hundred lots in Lago Vista that are subject to restrictive

covenants and assessments managed by the Association. The Association is a non-profit corporation
organized under the laws of Texas and, therefore, must conform with the requirements of the Texas

Non-Profit Corporation Act (the Act). See Tex. Rev. Civ. Stat. Ann. arts. 1396-1.01-11.02 (West

2003 & Supp. 2006). The Association’s covenants require property owners to belong to the

Association and allow the Association to collect assessments for each lot owned. The Association

allows one vote per member, regardless of the number of lots owned by each member. Beadles has

been a member since 1996, but may cast only one vote even though he owns hundreds of lots in Lago

Vista. Beadles believes that the Association’s per capita voting structure is illegal and violates the

Act, which he argues requires each member to receive one vote per lot owned.

               In 2000, Beadles filed a declaratory judgment suit, asserting in part that the

Association’s assessments were invalid because the per capita voting structure violated the Act.

Beadles v. Lago Vista Prop. Owners Ass’n, Inc., No. 03-02-00228-CV, 2002 Tex. App. LEXIS 7940

(Tex. App.—Austin Nov. 7, 2002, pet. denied) (not designated for publication) (“Beadles I”). The

trial court in Beadles I granted the Association’s motion for summary judgment, which argued that:

limitations barred Beadles’s complaints, a default judgment rendered in a separate suit and requiring

Beadles to pay maintenance fees for years 1996 through 2000 was res judicata on Beadles’s

declaratory judgment claim, and the Association did not act beyond its authority. Id. at *3-4. In

affirming the trial court’s judgment, we considered Beadles’s arguments related to the voting

structure, albeit briefly, and concluded that the Act did not bar per capita voting. Id. at *9.

               After our decision in Beadles I, Beadles continued to assert that the Association’s

voting structure is illegal and violates the Act. He also refused to pay assessments made against his

properties in 2002, 2003, and 2004. In 2004, the Association filed suit to collect those unpaid

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assessments, as well as late charges, interest, and attorney’s fees, stating that it had secured the

unpaid assessments by a lien. Beadles answered with a counterclaim for declaratory relief and

asserted affirmative defenses, contending that the Association was illegally constituted due to the

voting structure and thus lacked authority to make the assessments.1 The Association filed a motion

for summary judgment, arguing that Beadles’s affirmative defenses and counterclaim, all based on

the alleged illegality of the per capita voting structure, were barred by res judicata and the statute of

limitations. The trial court granted the Association’s motion for summary judgment without

specifying the grounds on which judgment was granted and ordered Beadles to pay the assessments,

interest, and attorney’s fees.

                                            DISCUSSION

                As a preliminary matter, the Association filed an affidavit stating that Beadles has

paid the judgment in full and contending that because Beadles has completely satisfied his judgment

debt, the appeal should be dismissed as moot. Beadles contends that the payment was made under

protest, so the appeal is not moot. There is a dispute in the affidavits presented by the parties as to

whether Beadles expressed an intent to proceed with his appeal at the time he paid the judgment.

In his response to the Association’s motion to dismiss, Beadles explains that he wanted to sell some

of his property under the Association’s lien and therefore had to pay the judgment to clear title for

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          The motion for summary judgment, response to the motion, and the parties’ appellate briefs
all state that Beadles asserted a counterclaim seeking a declaration that the Association lacked
authority to assess his property and was illegally elected and constituted. However, Beadles’s
original answer does not assert a counterclaim, but instead only asserts those arguments as
affirmative defenses. Because this issue does not affect our discussion, we will proceed under the
presumption that Beadles did in fact assert a counterclaim.

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the sale. He attached an affidavit by his attorney averring that before the Association accepted

Beadles’s payment, the attorney told the Association’s attorney that Beadles had tendered payment

under protest and for the sole purpose of clearing title in order to sell the property. In response, the

Association’s attorney averred that “[p]rior to receiving [Beadles’s] checks, I had no discussion with

Hugh Beadles or any representative of Hugh Beadles with regard to the payment of the outstanding

Judgment.” Rather than parsing the details of timing or deciding between competing affidavits, we

will follow the rule stated by the supreme court in Miga v. Jensen, that “payment on a judgment will

not moot an appeal of that judgment if the judgment debtor clearly expresses an intent that he intends

to exercise his right of appeal.” 96 S.W.3d 207, 212 (Tex. 2002). We will consider the merits of

Beadles’s issues and we overrule the Association’s motion to dismiss.

               Beadles raises four issues on appeal. He contends that the trial court erred in

determining that his affirmative defenses and counterclaim were precluded by res judicata or barred

by limitations and in determining that the Association’s summary judgment evidence was competent.

We will address each in turn.

Res Judicata

               Beadles contends that the trial court could not properly have granted the Association’s

motion for summary judgment on the basis that this Court’s decision in Beadles I precluded

consideration of his affirmative defenses and counterclaim under res judicata. He claims that res

judicata does not apply because (1) any statement by this Court in Beadles I regarding the legality

of the Association’s voting structure was merely dicta, (2) the legality of the voting structure was not

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actually litigated, and (3) the claims at issue in this cause do not arise from the same transaction as

those already litigated.

                “Res judicata” is used to refer to “related concepts concerning the conclusive effects

given final judgments,” and “[w]ithin this general doctrine, there are two principal categories: (1)

claim preclusion (also known as res judicata); and (2) issue preclusion (also known as collateral

estoppel).” Barr v. Resolution Trust Corp., 837 S.W.2d 627, 628 (Tex. 1992) (citing Puga v. Donna

Fruit Co., 634 S.W.2d 677, 679 (Tex. 1982)). Claim preclusion bars the relitigation of claims that

have been finally adjudicated or should have been litigated in an earlier suit. Id. Issue preclusion

bars the relitigation of “particular issues already resolved in a prior suit.” Id. Res judicata bars later

litigation if there is a prior final judgment on the merits by a court of competent jurisdiction, identity

of parties or those in privity with them, and the later action is based on the same claims that were or

should have been raised in the first action. See Coalition of Cities for Affordable Util. Rates v.

Public Util. Comm’n, 798 S.W.2d 560, 563 (Tex. 1990); Texas Water Rights Comm’n v. Crow Iron

Works, 582 S.W.2d 768, 771-72 (Tex. 1979).

                We first address whether this Court’s consideration of the Association’s voting

structure in Beadles I can be regarded as a judgment on the merits. Beadles I was a declaratory

judgment action in which Beadles challenged the scope of the Association’s discretionary authority

and asserted that the Association’s per capita voting structure was illegal and invalid under the Act.

2002 Tex. App. LEXIS 7940, at *1. This Court twice upheld the validity of the Association’s voting

structure, and in both instances this determination was necessary to our holdings. Id. at *9, *22.

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               In the earlier suit, Beadles and another property owner argued that each vote taken

by the Association under the invalid voting procedure constituted a continuing breach that tolled the

running of limitations. Id. at *8. This required a determination of whether the Act permits per capita

voting, and we held that it did. Id. at *9 (“They [Beadles and the other plaintiff] maintain that the

Non-Profit Corporations Act does not permit per capita voting. Having examined the statute, we

find this argument to be without merit.”). We held, therefore, that any complaint regarding the

voting structure arose from the amendment of the Association’s voting procedures, which took place

in 1992, more than four years before the action was brought, and so the statute of limitations barred

the claim. Id. If this Court had determined that the voting procedures were not allowed under the

Act, there would have been a continuing breach that would have tolled the statute of limitations, and

Beadles’s claim would not have been barred by limitations. Our determination that the Act allows

per capita voting was necessary to our holding that the statute of limitations barred Beadles’s claim.

               This Court also briefly considered the validity of the voting structure when we

addressed Beadles’s affirmative defense to the Association’s counterclaim for unpaid assessments.

Id. at *22. We stated that we had already addressed the legality of the Association’s voting structure

and “resolved these issues against Beadles” and affirmed the award of assessments and attorney’s

fees. Id. It was necessary for the Court to determine that the Act allows per capita voting to affirm

the judgment of the district court.

               Beadles contends that because the trial court in Beadles I granted summary judgment

in favor of the Association based on statute of limitations grounds, it did not consider whether the

Association’s voting structure complied with the Act. Therefore, he argues that his claim was not

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actually litigated. However, regardless of the trial court’s decision, Beadles had full opportunity to

brief and litigate the Association’s voting structure in this Court and the trial court in that cause, and

the voting structure issue was related to the statute of limitations questions. As we explained above,

we determined that the Association’s voting structure was valid after full briefing by both parties.

We conclude that the issue was actually litigated.

                Beadles claims that res judicata does not bar his claims because the underlying

transaction in Beadles I was the failure to pay assessments for the years 1996-2000 while the

underlying transaction for this suit is the failure to pay the 2002, 2003, and 2004 assessments. We

disagree. The prior judgment inquired into and required a determination of the validity of the

Association’s per capita voting structure, and both actions involve the same parties. Therefore, res

judicata applies to bar Beadles’s claims.

                Finally, the Act states that:

        Each member, regardless of class, shall be entitled to one (1) vote on each matter
        submitted to a vote of the members, except to the extent that the voting rights of
        members of any class or classes are limited, enlarged, or denied by the articles of
        incorporation or the by-laws.

Tex. Rev. Civ. Stat. Ann. art. 1396-2.13(A) (West 2003). A “member” is defined as “one having

membership rights in a corporation in accordance with the provisions of its articles of incorporation

or its by-laws.” Id. art. 1396-1.02(A)(6) (West 2003). We find no language in the Act prohibiting

the creation of a per capita voting structure. Thus, we reiterate our holding in Beadles I, that the Act

does not bar the Association’s use of per capita voting. See 2002 Tex. App. LEXIS 7940, at *9. We

overrule Beadles’s third issue on appeal.

                                                    7
Statute of Limitations

                In his first and second issues, Beadles contends that his affirmative defenses and

counterclaim are not barred by the statute of limitations. Beadles argues that statutes of limitations

generally do not apply to affirmative defenses. See Villages of Greenbriar v. Torres, 874 S.W.2d
259, 266 (Tex. App.—Houston [1st Dist.] 1994, writ denied). He also asserts that the assessments

and the Association’s lien on his property created a cloud on the title to his property and that his

claim is not time-barred because a cause of action based on a cloud on title to real estate is not barred

by limitations as long as the cloud exists. See Texas Co. v. Davis, 254 S.W. 304, 309 (Tex. 1923).

                It is unnecessary for us to decide these arguments. When a trial court grants summary

judgment without specifying the basis for its judgment, the appealing party must show that each

ground asserted in the motion for summary judgment 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 summary

judgment if it is supported by any one of the movant’s theories. Id. Here, the trial court did not

specify whether summary judgment was granted on the basis of res judicata or limitations. Because

we have held that Beadles’s claims are barred by res judicata, we need not determine whether the

trial court could have granted summary judgment on limitations grounds. We overrule Beadles’s

first and second issues.

Competent Summary Judgment Evidence

                In his final issue, Beadles claims that the Association did not produce competent

evidence in support of its summary judgment motion. Specifically, he contends that the evidence

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does not show that the assessments were authorized by the appropriate authority, arguing that the

Association was not authorized to make assessments because its elections did not comply with the

Act. Therefore, he asserts, the affidavit’s identification of the amounts owed are only legal

conclusions.

               We review the trial court’s grant of summary judgment de novo, indulging

presumptions and resolving doubts in favor of the non-movant, and taking evidence as true evidence

favorable to the non-movant. Joe v. Two Thirty Nine Joint Venture, 145 S.W.3d 150, 156 (Tex.

2004). To prevail on a summary judgment motion, the movant must offer admissible evidence

proving that no genuine issue of material fact exists and that the movant is entitled to judgment as

a matter of law. Tex. R. Civ. P. 166a(c). A legal conclusion is insufficient to establish facts to

support a motion for summary judgment. Brownlee v. Brownlee, 665 S.W.2d 111, 112 (Tex. 1984).

               Beadles admits that his lots are subject to recorded restrictive covenants that require

him to be a member of the Association. He does not deny the Association’s authority to collect

assessments against him if its voting structure is in compliance with the Act. He claims only that

the Association is not authorized to make assessments because its elections violate the Act. Before

the trial court considered the Association’s motion, this Court had already determined that the

Association’s elections did not violate the Act. See Beadles I, 2002 Tex. App. LEXIS 7940, at *9.

Therefore, the evidence provided by the Association did not amount to mere legal conclusions but

instead was competent summary judgment evidence to prove the sums accrued over the years. The

Association provided sufficient evidence to support its summary judgment motion. We overrule

Beadles’s fourth issue.

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                                        CONCLUSION

              Having overruled all of Beadles’s issues on appeal, we affirm the trial court’s granting

of summary judgment.

                                             __________________________________________

                                             David Puryear, Justice

Before Justices B. A. Smith, Patterson, and Puryear

Affirmed

Filed: December 14, 2006

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