Court Opinion

ID: 9662562
Source: CourtListenerOpinion
Date Created: 2023-08-23 23:13:03.81547+00
Date Added: 2024-06-11T18:14:40.711211
License: Public Domain

OYARD, Justice,
dissenting.
I dissent from the Majority who, in my opinion, have isolated section 3.01 of the West II Declaration,1 not only from the other provisions of the West II Supplemental Declaration but also from the Master Declaration. In so doing, they have arrived at an unsound conclusion which violates the developer’s stated intent and the general scheme for development.
In the area of land use management, the homeowners’ association has recently emerged as a developing area of substantive law that draws upon concepts from real estate, corporate, municipal, and constitutional law. In order to understand the issues presented by this ease, it is essential to consider the unique interrelationship between a homeowners’ association and its members. The development of the homeowners’ association and its postdevelopment operation are inextricably linked. See W. Hyatt, Condominium and Homeowner ASSOCIATION PRACTICE: COMMUNITY Association Law § 1.03 (2d ed. 1988). The essential element of the association is the mandatory membership requirement in which all purchasers automatically become members, subject to the associations’ procedures and powers. See Perry v. Bridgetown Community Ass’n, 486 So.2d 1230, 1232-33 (Miss.1986). In an association, there is a common interest in the use or ownership of property. See Pooser v. Lovett Square Townhomes Owners’ Ass’n, 702 S.W.2d 226, 231 (Tex.App.—Houston [1st Dist.] 1985, writ ref’d n.r.e.). The mandatory membership aspect, coupled with the unique powers provided to the association, distinguishes it from the more traditional voluntary neighborhood development. It has been analogized in a loose sense to a “private government,” and the documents creating it are “viewed much like ... a constitution.” Hyatt, supra § 1.05(a)(1) at 11; see Pooser, 702 S.W.2d at 231. The association has the power to levy and collect assessments, and it has a lien with which to enforce the obligation. The basic creating document is the Master Declaration. It contains the plan of development and ownership, the proposed method of operation, and the rights and responsibilities of the owners within the association. It is a “covenant running with the land in that it is recorded in the land records and, like a deed, continues to apply to every person who becomes a property owner.” Hyatt, supra § 1.05(b)(3) at 19.
The issue in this case, drawn most narrowly, concerns the developer’s intention in effectuating section 3.01 in light of the obvious intent of the master scheme for development. We ascertain intent from the instruments as a whole, not from an isolated clause or paragraph. See Dallas Joint Stock Land Bank v. Harrison, 138 Tex. 84, 92, 156 S.W.2d 963, 967 (1941); Parker v. Delcoure, 455 S.W.2d 339, 343 (Tex.Civ.App.—Fort Worth 1970, writ ref’d n.r.e.). Several instruments pertaining to the same purpose, whether executed contemporaneously or at different times, are read together as one agreement. See Board of Ins. Com’rs v. Great S. Life Ins. Co., 150 Tex. 258, 267, 239 S.W.2d 803, 809 (1951); U.S. Life Title Co. v. Andreen, 644 S.W.2d 185, 190 (Tex.App.—San Antonio 1982, writ ref’d n.r.e.). Additionally, the wording of the instruments will be considered in light of the circumstances surrounding their execution. Sun Oil Co. v. Madeley, 626 S.W.2d 726, 731 (Tex.1981). Our paramount concern is to harmonize and give effect to all the provisions of the Master Declaration and the West II Declaration so that none are rendered meaningless. See Universal C.I.T. Credit Corp. v. Daniel, 150 Tex. 513, 518, 243 S.W.2d 154, 157-58 (1951).
Viewing the instruments in light of these rules, the developer’s intentions are clear. *507As developer and creator, his stated purpose was to bind each owner to all other owners to effectuate the purposes of the Association.2 Accordingly, membership in the Association was not voluntary. Assessments were not voluntary. Nor did he intend for West II to opt out of the Association with the concurrence of ninety percent of its owners.3
The analysis which compels me to this conclusion must logically begin with the Master Declaration wherein the developer states on page one:
WITNESSETH:
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WHEREAS, Developer desires to provide for the preservation of the values and amenities in said community and for the maintenance of said parks, playgrounds and open spaces, and, to this end, desires to subject the real property described in Article II4 together with such additions as may hereafter be made thereto (as provided in Article II) to the covenants, restrictions, easements, charges and liens hereinafter set forth, each and all of which is and are for the benefit of said property and each owner thereof....
(Emphasis added.)
On the following page of the Master Declaration, the developer again reiterates that SpringPark and future additions thereto shall be subject to the “Master Declaration and all [its] terms, provisions, covenants, and conditions.” Next, the developer provided for the manner and means by which such future additions would merge into the Association. Additions became subject to the Master Declaration by filing a “Supplementary Declaration” which incorporated the covenants of the Master Declaration within its terms. These Supplementary Declarations could contain complimentary modifications of the covenants and restrictions contained in the Master; however, inconsistent additions or modifications were expressly prohibited. Membership in the Association was mandatory for every lot owner subject to assessment and every member agreed by covenant to pay assessments. These covenants and restrictions ran with the land and were enforceable on any lot subject to the Master Declaration unless seventy-five percent of all Association members voted to the contrary.
Two sections, 11.01 and 11.03, provide the only means of changing the Master Declaration.5 Section 11.01 provides that covenants and restrictions “shall run with and bind the Properties subject to this Master Declaration” and shall be enforceable unless seventy-five percent of all the Asso*508ciation members vote to the contrary. Section 11.03 mandates that, except as provided in section 11.01, the Master Declaration may not be changed, amended, or abolished to any extent without the consent of seventy-five percent of all the Association members. These provisions, recorded in 1973, leave no doubt as to the developer’s intentions when he formed the Association; all Association owners must pay assessments, and no owner can change this provision of the master plan without the requisite vote from all members.
The record reflects that after the filing of the Master Declaration, thirteen supplemental declarations were filed, all of which created additions to SpringPark as contemplated by the Master Declaration. Among these was West II, which was added in 1977 by means of the requisite Supplemental Declaration (West II Declaration). The developer/owner of SpringPark was also the developer/owner of the property constituting West II. Within the provisions of the West II Declaration entitled “Assessments,” the developer made numerous references to the manner in which the West II owners were required to conform to the Master Declaration:
1. The developer and each owner covenants and agrees to pay assessments levied by the Association as provided in Article V of the Master Declaration.
2. The developer and each owner covenants and agrees that assessments levied pursuant to the Master shall attach and remain a charge upon each West II lot, secured by a continuing lien upon each lot “enforceable in accordance with all the terms and provisions of the Master Declaration.”
3. Assessments levied by the Association pursuant to the Master Declaration shall be used for promoting the welfare of the owners of SpringPark and also for “enforcing the covenants and restrictions contained in the Master Declaration.”
4.The developer agreed to convey designated common areas within West II to the Association pursuant to and in accordance with section 4.02 of the Master Declaration.6 (This fact alone is a compelling indication that the developer intended that West II remain subject to the Association until such time as seventy-five percent of all members agreed to their independence. In my view, this fact highlights the illogical conclusion reached by the majority. Why would the developer agree to and subsequently convey title to real property within West II if he truly intended for them to withdraw from the Association based on their own vote?)
As envisioned by the Master Declaration, the developer included in the West II Declaration a section entitled “Permitted Uses and Restrictions.” This section contains twenty-two restrictions which regulate the character and uses of the West II lots. Immediately following these use restrictions is section 3.01 which provides as follows:
The covenants and restrictions contained in these Use Restrictions shall run with and bind the Properties subject to these Use Restrictions and shall inure to the benefit of and be enforceable by the Owners of the Lots subject to the Use Restrictions ... for a term of thirty (30) years from the date that these Use Restrictions are recorded_ During the initial thirty (30) year term a vacation or modification hereof shall be effective if a written instrument be signed by ninety percent (90%) of the Owners of the Lots....
(Emphasis added.)
The purpose of section 3.01 is clear. It was intended to allow the West II owners to vacate or modify any of the use restrictions that pertained to their addition. This would have included, for example, any of the twenty-two restrictions contained in the *509West II Use Restrictions such as roofing materials, exterior cladding materials and colors, or set-back requirements. However, to the extent that a modification or revocation pertained to a matter which was inconsistent with the Master Declaration, it required the consent of seventy-five percent of the total number of members in the Association. This interpretation is entirely consistent and harmonious with the master plan.
We have been presented with a carefully drafted master plan with built-in procedures for future development which defined future relationships in terms of mandatory membership and assessments and which provided the method for making changes thereto. In spite of the aforementioned, the Majority reads section 3.01 to say that the developer intended to permit West II to secede by a ninety percent vote of the subdivision. To support a result which is contrary to the overall strategy for development, the Majority relies on two cases: Loving v. Clem, 30 S.W.2d 590 (Tex.Civ.App.—Dallas 1930, writ ref’d n.r.e.) and Meyerland Community Improvement Ass’n v. Temple, 700 S.W.2d 263 (Tex.App.—Houston [1st Dist.] 1985, writ ref’d n.r. e.), neither of which is on point. Both of these cases involved traditional residential developments in which certain residents desired to convert their property from residential to nonresidential use. Both cases required the interpretation of deed restrictions and the ability to amend restrictive covenants contained therein. However, neither of these cases involved a homeowners association established pursuant to a recorded master plan for development.
The Majority claims that West II’s election to secede from the Association and thereby terminate its obligation to pay assessments did not change any of the provisions of the Master Declaration. Did section 3.01 abolish, amend, or change the Master Declaration? There can be no doubt that under the Majority’s interpretation it did. The covenant to pay assessments, together with the voting provisions to effect changes thereto, has been rendered a nullity. Additionally, the Majority has abrogated the developer’s stated desire that lots in future additions be subject to “all terms, provisions, covenants, and conditions” of the Master Declaration.
In order for a subsequent instrument to amend the original restrictive covenant, the instrument creating the original restrictions must establish both the right to amend such restrictions and the method of amendment. Couch v. Southern Methodist Univ., 10 S.W.2d 973, 974 (Tex.Comm’n App.1928, judgm’t. adopted); Hanchett v. East Sunnyside Civic League, 696 S.W.2d 613, 615 (Tex.App.—Houston [14th Dist.] 1985, writ ref’d n.r.e.). Additionally, the right to amend such restrictions implies only those changes contemplating a correction, improvement, or reformation of the agreement, rather than a complete destruction of it. Couch, 10 S.W.2d at 974. Here, according to the Majority, the instruments allowed West II, without the consent of the Association, to alter the subject matter of the agreement so as to destroy it. Id.7
*510In summary, the West II Supplemental Declaration was just that—it served to supplement the Master Declaration in a complementary way. Its purpose was twofold: primarily, it brought West II into the fold of the Association and subjected it to all the provisions of the Master Declaration; secondarily, as envisioned, it provided the West II owners their own set of aesthetics in the form of twenty-two use restrictions which, according to section 3.01, could be altered by vote of ninety percent of the West II owners.
Following the creation of the Master Declaration and the sale of the first lots thereunder, each purchaser in the Association had the right to rely on the fact that all purchasers took subject to the restrictive covenants, unless modified in accordance with the Master Declaration. The effect of allowing West II, on its own, to secede from the Association does violence to the general scheme of development. Such a result is not only manifestly unfair to the other Association members but contrary to the intent of the developer. Therefore, I conclude that the West II owners were members of the Association and that the developer’s intent rendered ineffective the attempted secession by West II from the Association, given the manner in which it was done. I would overrule all of West II’s points of error and affirm the judgment below.

. The "use restrictions” referenced by the majority are designated as the “West II Declaration” for the purposes of this dissent.

. In the Master Declaration, the developer states that SpringPark was formed to acquire, improve, and maintain common areas for the benefit of its members and to promote the health, safety, and welfare of its residents. These goals, of course, could only be accomplished through the collection and disbursement of assessments.

. "[M]any purchasers do not understand that community associations are mandatory membership associations in which all property owners must join. This misunderstanding is exacerbated by the occasional mistaken assumption that the relationship is one of contract that might be varied or cancelled by a dissatisfied party.... It is hard for some owners initially to understand the fact that they have vested in an elected board of directors a substantial amount of authority and control over the use of their home and the common property. Equally difficult to understand when disagreements arise is the fact that the declaration is an enforceable restriction, binding on all parties, which mandates that certain actions may be taken and that certain actions not be taken in the use and enjoyment of one’s property." Hyatt, supra § 3.06, at 59-60.

. Article II is entitled “Property Subject to this Declaration: Additions Thereto." The "real property" referred to by the developer was the land which comprised SpringPark at the time of its creation.

. Section 11.02 empowered the developer to amend the Master Declaration until such time as the first portion of the subject properties was conveyed. This section ceased to be operative when the first portion of the subject properties was conveyed by the developer. This is in accord with the well settled rule that a developer may only abrogate or modify a plan ex parte if none of the restricted property has been sold. See Burns v. Wood, 492 S.W.2d 940, 944 (Tex.1973); Hill v. Trigg, 286 S.W. 182, 184 (Tex.Comm’n App.1926, judgm't adopted); Parker, 455 S.W.2d at 343.

. Later, this agreement was memorialized by a Quit Claim Deed wherein the developer deeded a 0.221 acre tract lying within West II to the Association. This tract has been owned and maintained by the Association as a common area since its conveyance. The deed recites that it was made "for the express purpose that [the Association] may own, occupy and hold the Premises as additional Common Areas and Common Properties pursuant to the general scheme established by the Master Declaration and the West II Supplemental Declaration."

. Developers' attempts to vary the developmental scheme and its basic concept have been unsuccessful even when there has been a retention of a unilateral right to amend. In Flamingo Ranch Estates, Inc. v. Sunshine Ranches Homeowners, Inc., 303 So.2d 665, 666 (Fla.Dist.Ct.App.1974), the developer sought to exercise that unilateral amendment power. On several prior occasions, it had done so without objection, although the previous amendments had not been inconsistent with the general scheme of development. The amendment that the court was considering sought to change the development’s complexion by permitting a mix of business and residential complexes. The court rejected the proposed amendment and held that the unilateral right to amend contained in the original Declaration of Restrictions had to be read in light of a "requirement of reasonableness,” and further held that to permit the complexion of the project to be changed would "destroy the general scheme or plan of development.” Id.
In Wright v. Cypress Shores Development Co., 413 So.2d 1115, 1124 (Ala.1982), the Alabama Supreme Court held that where a general scheme lor development is created, a reservation of the right to annul, cancel, amend, or modify the restrictive covenants could only be exercised in a reasonable manner consistent with the general plan for development. Id.
A recent Alabama trial court decision reformed a Declaration of Covenants, Conditions, and Restrictions to strike an amendment executed by the developer that made the mandatory *510membership nature of the association optional for a purchaser with loans guaranteed, insured, or purchased by the Veterans Administration, the Federal Home Administration, the Federal National Mortgage Association, or the Federal Home Loan Mortgage Corporation. While noting that the developer’s intent had been to facilitate financing, the court rejected the amendment as being violative of the overall scheme of development, holding that the mandatory membership nature of an association was a sine qua non of a community association that could not be changed without doing violence to the overall development plan and to the rights and interests of all those who had relied upon it. Hyatt, supra § 5.03, at 168 (citing Lake Forest Property Owners Ass’n v. Lake Forest, Inc., No. CV 85-500229 (Circuit Ct. of Baldwin County, Alabama)).