Court Opinion

ID: 2875398
Source: CourtListenerOpinion
Date Created: 2015-09-06 06:00:48.583796+00
Date Added: 2024-06-11T11:35:33.412615
License: Public Domain

TEXAS COURT OF APPEALS, THIRD DISTRICT, AT AUSTIN

                                       NO. 03-06-00371-CV

                                   Johnie Jennings, Appellant

                                                 v.

      Carolyn Bindseil, Dan Bindseil, Jannalyn Welch, Julian Welch, Allen Knodel,
  Betty Knodel, Dale A. Friesenhahn, Horacio Ayala, Richard Aramendia, Daryl Payne,
     Melinda Payne, Deanna S. Wilson, Rodney Wilson, D.M. Stuller, William Hall,
 Clyde Marbach, Kurt Menking, Katherine Swoboda, Don Wallace, and Charles Wittler,
                                        Appellees

    FROM THE DISTRICT COURT OF COMAL COUNTY, 207TH JUDICIAL DISTRICT
       NO. C2005-0149B, HONORABLE JACK H. ROBISON, JUDGE PRESIDING

                                           OPINION

                Johnie Jennings appeals from a summary judgment granted in favor of a coalition of

landowners on Bindseil Lane in Comal County, Texas.1 The Bindseil Landowners brought suit

against Jennings under the Texas Declaratory Judgment Act (TDJA) and the Texas Property Code,

seeking a declaratory judgment that a certain structure placed by Jennings on his property violated

a deed restriction prohibiting mobile homes on the property. The Bindseil Landowners further

sought a declaratory judgment that Jennings had proper notice that his act of placing the structure

on his property would violate the deed restriction. The trial court granted the Bindseil Landowners’

motion for summary judgment on their requests for declaratory relief. The trial court also granted

       1
           For convenience, we will refer to the appellees collectively as the Bindseil Landowners.
the Bindseil Landowners’ request for a permanent injunction, preventing Jennings from maintaining

the structure on his property and requiring that he remove the structure and all associated equipment.

Because we hold that a question of fact exists regarding whether the deed restriction prohibits the

type of structure Jennings placed on his property, we reverse the trial court’s order and remand the

case for trial.

                                             BACKGROUND

                  In 1999, Jennings purchased 2.25 acres in rural Comal County from Allen and Betty

Knodel. In 2004, Jennings purchased a modular home, also referred to as industrialized housing,

for assembly on the property.2        When Jennings’s home was delivered to his property on

        2
          Because this case revolves around the applicability of certain terminology to describe
various types of housing, we will use the terms “modular home” and “industrialized housing”
interchangeably to refer to the type of structure defined in § 1202.002(a) of the Texas Occupations
Code. We will use the term “manufactured housing” to refer to the type of structure defined in
§ 1201.003(9) of the Texas Occupations Code.

      Industrialized housing is governed by chapter 1202 of the Texas Occupations Code, while
manufactured housing is governed by chapter 1201. “Industrialized housing” is defined as:

        [A] residential structure that is:

        (1) designed for the occupancy of one or more families;

        (2) constructed in one or more modules or constructed using one or more modular
        components built at a location other than the permanent site; and

        (3) designed to be used as a permanent residential structure when the module or the
        modular component is transported to the permanent site and erected or installed on
        a permanent foundation system.

Tex. Occ. Code Ann. § 1202.002(a) (West 2004).

                                                  2
December 22, 2004, a neighboring landowner objected to the delivery, claiming that the structure

violated a deed restriction against mobile homes that was applicable to Jennings’s property.

               The deed restriction at issue was written by Dan Bindseil in 1978 and states:

       No mobile home or homes or temporary houses or residences shall be placed upon
       or remain upon the property conveyed hereby, nor shall such property be used for the
       purposes of a tourist park, trailer court, mobile home park or community, nor for an
       overnight camping or trailer facility.

       “Manufactured housing” is defined as “a HUD-code manufactured home or a mobile home.”
Tex. Occ. Code Ann. § 1201.003(15) (West 2004 & Supp. 2007). According to § 1201.003(9) of
the Texas Occupations Code:

       “HUD-code manufactured home”:

       (A) means a structure:

               (i) constructed on or after June 15, 1976, according to the rules of the United
               States Department of Housing and Urban Development;

               (ii) built on a permanent chassis;

               (iii) designed for use as a dwelling with or without a permanent foundation
               when the structure is connected to the required utilities;

               (iv) transportable in one or more sections; and

               (v) in the traveling mode, at least eight body feet in width or at least 40 body
               feet in length or, when erected on site, at least 320 square feet;

       (B) includes the plumbing, heating, air conditioning, and electrical systems of the
       home; and

       (C) does not include a recreational vehicle as defined by 24 C.F.R. Section 3282.8(g).

Tex. Occ. Code Ann. § 1201.003(9) (West 2004 & Supp. 2007).

       The statutory definition of “mobile home” is essentially identical to that of a “HUD-code
manufactured home” except that a mobile home is a structure constructed before June 15, 1976 and
is not required to meet HUD requirements. See Tex. Occ. Code Ann. § 1201.003(17)
(West 2004 & Supp. 2007).

                                                    3
               Jennings concedes that the deed restriction applies to his property and that he had

notice of the restriction when he purchased the property. However, Jennings argues that after

researching modular homes and contacting the state agency responsible for regulating modular

homes, he came to the conclusion that a modular home would not violate the deed restriction

against mobile homes.

               Jennings’s home was delivered in the form of two factory-constructed modular units

mounted on a flat-bed truck and driven onto the property. The units were then connected on site and

attached to the property on a permanent concrete foundation. The home required extensive on-site

finish work, including completion of the roof and installation of dormers. The house plans for the

home call for front and back porches and a carport to be installed, but the porches and carport were

not completed, due to the injunction resulting from this litigation, which prohibited any further

work on the home.

               On February 14, 2005, the Bindseil Landowners filed suit against Jennings to enforce

the deed restriction against mobile homes. Jennings counter-claimed, requesting a declaratory

judgment that his home was not subject to the restriction. The parties filed cross motions for

summary judgment, and the trial court granted the Bindseil Landowners’ motion, declaring that the

deed restriction prohibits modular homes, that Jennings’s home was in violation of the deed

restriction, and that Jennings was on notice that his acts were in violation of the restriction. The

court also granted a permanent injunction, prohibiting Jennings from maintaining the home and

requiring him to remove it from the property within 30 days. The trial court denied the Bindseil

Landowners’ request to impose statutory penalties but granted their request for attorney’s fees.

Jennings’s traditional and no-evidence motions for summary judgment were denied.

                                                 4
               Jennings argues on appeal that the deed restriction does not apply to his modular

home. In the alternative, he argues that the deed restriction is ambiguous and that fact questions

exist regarding whether the deed restriction applies to his home and whether he was on notice that

his home violated the deed restriction. He further argues that the Bindseil Landowners are not

entitled to injunctive relief because they failed to conclusively establish that they would be harmed

by the presence of a modular home on his property.

                                   STANDARD OF REVIEW

               Summary judgments are reviewed de novo. Valence Operating Co. v. Dorsett,

164 S.W.3d 656, 661 (Tex. 2005). When, as here, both parties move for summary judgment on the

same issues, and the trial court grants one motion and denies the other, the appellate court considers

the summary-judgment evidence presented by both sides, determines all questions presented, and

if the reviewing court finds that the trial court erred, renders the judgment the trial court should

have rendered. Id.

               The Bindseil Landowners filed a traditional motion for summary judgment and

Jennings filed both traditional and no-evidence motions for summary judgment. To prevail on a

traditional motion for summary judgment, the movant must show that there is no issue of material

fact and that it is entitled to judgment as a matter of law. TX Far West, Ltd. v. Texas Invs. Mgmt.,

Inc., 127 S.W.3d 295, 301 (Tex. App.—Austin 2004, no pet.). Evidence favorable to the non-

movant is taken as true and every reasonable inference must be indulged in favor of the non-movant

and any doubts resolved in its favor. Id.

               A no-evidence motion for summary judgment must be granted if the moving party

asserts that there is no evidence of one or more essential elements of a claim or defense on which

                                                  5
the non-movant would have the burden of proof at trial, and the nonmovant fails to produce more

than a scintilla of summary-judgment evidence raising a genuine issue of material fact on those

elements. Tex. R. Civ. P. 166a(i); Cox Texas Newspapers, L.P. v. Penick, 219 S.W.3d 425, 432-33

(Tex. App.—Austin 2007, pet. denied).

               We review a trial court’s grant of injunctive relief for an abuse of discretion.

Operation Rescue-Nat’l v. Planned Parenthood, 975 S.W.2d 546, 560 (Tex. 1998). An abuse of

discretion occurs when a trial court acts in an unreasonable or arbitrary manner, or without

reference to guiding rules or principles. Holubec v. Brandenberger, 214 S.W.3d 650, 657

(Tex. App.—Austin 2006, no pet.).

                                           DISCUSSION

Deed Restrictions

               Covenants restricting the free use of land are not favored by the courts, but will be

enforced if they are clearly worded and confined to a lawful purpose. Wilmoth v. Wilcox,

734 S.W.2d 656, 657 (Tex. 1987). When the language of a restrictive covenant is unambiguous, the

Texas Property Code requires that the restrictive covenant be liberally construed to give effect to its

purpose and intent. Tex. Prop. Code Ann. § 202.003(a) (West 2007). However, if the language is

found to be ambiguous, the restrictive covenant is construed strictly against the party seeking to

enforce the restriction, and all doubts must be resolved in favor of the free and unrestricted use of

the property. Wilmoth, 734 S.W.2d at 657. The words and phrases in the restriction must be given

their commonly accepted meaning as of the date the restriction was written and must not be enlarged,

extended, changed, or stretched by construction. Id. at 657-58.

                                                  6
               Restrictive covenants are subject to the general rules of contract construction.

Pilarcik v. Emmons, 966 S.W.2d 474, 478 (Tex. 1998). If a restrictive covenant is subject to more

than one reasonable interpretation so that the intention of the parties cannot be determined, the

restriction is ambiguous. See Columbia Gas Transmission Co. v. New Ulm Gas, Ltd., 940 S.W.2d
587, 589 (Tex. 1996). Whether a restrictive covenant is ambiguous is a question of law that must

be decided by examining the covenant as a whole in light of the circumstances present when it was

drafted. See id.

               The deed restriction on Jennings’s property prohibits “mobile homes.” To determine

if ambiguity exists, we must look to the common and ordinary meaning of the term “mobile home”

as of the date the restriction was drafted to determine if the prohibition on mobile homes is

susceptible to two or more meanings. See Dempsey v. Apache Shores Prop. Owners Assoc., Inc.,

737 S.W.2d 589, 592 (Tex. App.—Austin 1987, no writ).

               “Mobile home” is a term generally used to describe factory-built residential

structures. The terminology used to describe these structures has evolved over the years to keep pace

with innovations in technology and design. The original term generally associated with such housing

was “house trailer.” As the Texas Supreme Court observed in Wilmoth, 734 S.W.2d at 658, “[i]n

the late 1960’s the term ‘mobile home’ began to replace the term ‘house trailer.’ In the late 1970’s

the industry applied the term ‘manufactured homes’ to the products, replacing the name ‘mobile

home.’” As the industry began to make design improvements and use different names to avoid

negative connotations associated with original types of factory-built housing, legislative changes

were made to reflect the new terminology. See Dempsey, 737 S.W.2d at 592 (“At the time the

restricted covenants were drafted [between 1968 and 1972], there was statutorily only the ‘mobile

                                                 7
home.’ When the need became apparent, legislation was enacted to protect consumers and the terms

‘manufactured homes,’ ‘modular homes,’ and later ‘industrialized housing’ were employed . . . .”).

               As the terms used to describe various forms of factory-built housing have evolved,

the regulation of such structures has also become highly specialized. Currently, manufactured

housing is regulated by the Texas Department of Housing and Community Affairs (TDHCA), while

modular homes are regulated by the Texas Department of Licensing and Regulation (TDLR).3

However, this Court has recognized that, while a statutory scheme has evolved that differentiates

manufactured homes from modular homes, “[t]he differences between the two are

technical and minor.” Id.

               Jennings argues that the current regulatory, statutory, and other distinctions between

his home and other types of factory-built housing are sufficient to exclude his home from the

language of the deed restriction.     According to a letter from TDLR sent to Jennings on

February 22, 2005:

       The primary difference between an industrialized (modular) home and a
       manufactured (HUD) home are:

       a. The codes to which the homes are built. Modular housing in the State of Texas
       is constructed to the same codes as site built housing. Manufactured housing is
       constructed to Federal HUD code standards;

       b. Modular homes must be installed on a permanent foundation system;

       3
         Jennings contends that his home was assigned specific label numbers to certify that it is
considered a modular home by TDLR and that it was manufactured in accordance with the
requirements of the Texas Industrialized Building Code Council.

                                                 8
       c. Titles are not issued for modular homes. Once installed the home becomes part
       of the real property; and

       d. A municipality may not discriminate against modular homes built under the IHB
       program from being placed inside city limits or restrict these buildings to areas zoned
       for “manufactured” housing. (Please reference § 1202.251(b) of the Occupations
       Code).

               Jennings emphasizes the fact that municipalities may not discriminate against

modular homes in zoning decisions or adopt regulations that are more restrictive for modular homes

than for site-built homes, including restricting the location of modular homes to areas zoned for

manufactured housing. Significantly, however, while a municipality may not adopt a regulation “that

is more restrictive for industrialized housing than that required” for site-built housing, the

statute further states, “This section does not . . . affect deed restrictions.” Tex. Occ. Code

Ann. § 1202.253(e), (f)(2) (West 2004 & Supp. 2007). This language makes it clear that the

legislature recognized the existence of deed restrictions prohibiting factory-built housing and

indicated a clear intention that such restrictions were to remain unaffected by subsequent regulatory

and statutory distinctions.

               The deed restriction at issue here was written in 1978, before the terms “manufactured

housing,” “modular housing,” or “industrialized housing” were commonly used. Because we must

“look to the common and ordinary meaning of the term ‘mobile home’ as of the date the covenant

was drafted,” Dempsey, 737 S.W.2d at 592, the current distinctions between modular homes and

manufactured homes are not dispositive. As we noted in Dempsey, “[t]he covenant drafters had no

way to predict these subsequent technical statutory distinctions, and the language they chose should

be viewed in that light.” Id. at 593.

                                                 9
                 Because the covenant drafters did not have the benefit of subsequent technical

statutory distinctions at the time the deed restriction on “mobile homes” was written, we hold that

the covenant is unambiguous in its prohibition of mobile homes and any generic successors,

regardless of minor changes in construction technology, design, or regulation.4 To hold otherwise

would essentially require drafters of restrictive covenants to foresee an infinite array of technological

advances that might take place in the future and to draft a restriction prohibiting structures described

by terminology that does not yet exist. Furthermore, “restrictive covenants would be rendered

meaningless if they could be implicitly subverted by legislatively changing the name of that which

is prohibited.” Id. at 593. Therefore, we hold that the restrictive covenant prohibiting mobile homes

is unambiguous as written and must be liberally construed to give effect to its purpose and intent,

which was to prohibit mobile homes and their generic successors. See Tex. Prop. Code Ann.

§ 202.003(a). Thus, the question at hand is whether Jennings’s home constitutes a mobile home or

a generic successor, notwithstanding the label used by statute or regulatory authorities to describe

such a structure in 2008.

        4
            As the Tyler court of appeals has aptly stated:

        To a greater or lesser extent, almost all the machines and equipment with which we
        are most familiar have been dramatically improved in recent times. . . . But the most
        radical advances rarely result in change that so overflows the basic definition of an
        object so as to require its re-classification. Airplanes and automobiles have been
        spectacularly altered and improved over this century, but they remain airplanes and
        automobiles. A 1981 Cadillac bears little resemblance to a model-T Ford, but it is
        still an automobile.

Gigowski v. Russell, 718 S.W.2d 16, 19 (Tex. App.—Tyler 1986, writ ref’d).

                                                   10
               However, when we held that the deed restriction against mobile homes in Dempsey

was unambiguous, a jury had already made a factual finding that the structure at issue—a double-

wide manufactured home—actually qualified as a mobile home. See id. at 593 (“Double-wides were

considered ‘mobile homes’ at the time the covenants were drafted and the jury found, based on

considerable evidence, that despite improvements in quality and appearance, they are still ‘mobile

homes’ today. We cannot say that finding is legally or factually erroneous.”).

               In the present case, we do not have the benefit of a jury determination regarding

whether the structure Jennings placed on his property constitutes a mobile home or a generic

successor as prohibited by the deed restriction.5 As a result, summary judgment is improper because

a fact question exists regarding whether Jennings’s home qualifies as the type of structure that the

deed restriction prohibits. Therefore, we reverse the trial court’s judgment declaring that Jennings’s

home violates the deed restriction against mobile homes and remand the cause for a determination

of whether Jennings’s home constitutes a mobile home or a generic successor of a mobile home as

prohibited by the deed restriction, giving effect to the liberal construction required for unambiguous

deed restrictions. See Tex. Prop. Code Ann. § 202.003(a).

       5
          Due to the differences between manufactured homes and modular homes, we acknowledge
that the issue of whether Jennings’s home constitutes a “mobile home” or a generic successor may
be a closer question than the determination made in Dempsey, 737 S.W.2d at 591, and Wilmoth,
734 S.W.2d at 657, that a double-wide manufactured home is a “mobile home.” While Jennings’s
home may not have differed significantly in appearance from two double-wide manufactured homes
labeled as “modular units” and connected on site, such a determination is necessarily a fact issue for
the jury to decide.

                                                 11
Notice

               A purchaser is bound only by those restrictive covenants of which he has actual or

constructive notice. Davis v. Huey, 620 S.W.2d 561, 565-66 (Tex. 1981). Jennings concedes that

he had notice of the deed restriction prohibiting mobile homes, but argues that because of his

independent research and the information he received from government agencies, he was acting on

a good-faith belief that his home did not violate the restriction. Jennings’s good-faith belief,

however, is irrelevant.    A purchaser is bound by restrictive covenants of which he has

notice, regardless of whether he believed that his actions violated the restriction. See Pheasant

Run Homeowners Assoc., Inc. v. Kastor, 47 S.W.3d 747, 753-54 (Tex. App.—Houston [14th Dist.]

2001, pet. denied) (holding that property owners who are aware of deed restrictions and

accompanying guidelines are considered to be on notice of such restrictions despite believing

that guidelines are unclear and inapplicable);        Tien Tao Assoc., Inc. v. Kingsbridge Park

Cmty. Assoc., Inc., 953 S.W.2d 525, 528 (Tex. App.—Houston [1st Dist.] 1997, no pet.)

(holding that property owner could not argue it had no notice of deed restrictions simply because

guidelines were unclear when owner acknowledged having copy of such restrictions).

               However, because we have determined that a fact issue exists regarding whether

Jennings’s home is prohibited by the deed restriction, we also reverse and remand the issue of

whether Jennings had notice that his actions in placing such a structure on his property violated the

deed restriction. We cannot conclude that Jennings was on notice that his actions violated the

restriction when there has been no final determination regarding whether a violation actually

                                                 12
occurred. As a result, the trial court’s declaratory judgment that Jennings had notice that his actions

violated the restriction is also reversed and remanded.

The Permanent Injunction

               Jennings argues that the Bindseil Landowners have not established that they will

suffer an actual and substantial injury because of the presence of a modular home on Jennings’s

property. While the general rule is that one seeking injunctive relief must establish an actual and

substantial injury, “[t]here is a well-settled exception to the general rule in restrictive covenant

cases.” Gigowski v. Russell, 718 S.W.2d 16, 21 (Tex. App.—Tyler 1986, no writ.). A covenant

restricting the use of land may be enforced by injunction without a showing of any particular amount

of damages, provided there is a distinct or substantial breach of the restrictive covenant. Id.

However, because we have determined that the Bindseil Landowners failed to conclusively establish

through summary-judgment evidence that Jennings committed a distinct or substantial breach of the

deed restriction against mobile homes, we also reverse the trial court’s judgment issuing a permanent

injunction.

Attorney’s Fees

       In its order granting summary judgment in favor of the Bindseil Landowners, the trial court

granted the Bindseil Landowners’ request for attorney’s fees. Because we have reversed and

remanded this case for a factual determination regarding whether the structure placed on Jennings’s

property was in violation of the deed restriction against mobile homes, we also remand the issue of

                                                  13
attorney’s fees for the trial court’s reconsideration pending the outcome of the necessary factual

determination.

                                          CONCLUSION

                 Because a genuine issue of material fact exists regarding whether the structure

Jennings placed on his property constitutes a mobile home or a generic successor as prohibited by

the deed restriction applicable to his property, we reverse the trial court’s judgment and remand this

case for further proceedings consistent with this opinion.

                                               __________________________________________

                                               Diane Henson, Justice

Before Chief Justice Law, Justices Waldrop and Henson;
 Concurring and Dissenting Opinion by Justice Waldrop

Reversed and Remanded

Filed: February 22, 2008

                                                 14