Court Opinion

ID: 4213787
Source: CourtListenerOpinion
Date Created: 2017-10-23 07:21:09.614095+00
Date Added: 2024-06-11T14:41:45.938511
License: Public Domain

Affirmed and Memorandum Opinion filed October 19, 2017.

                                      In The

                     Fourteenth Court of Appeals

                               NO. 14-16-00139-CV

  SOUTHWYCK, SECTION IV HOMEOWNERS’ ASSOCIATION, INC.,
                        Appellant
                                         V.

       SOUTHWYCK COMMUNITY ASSOCIATION, INC., Appellee

                    On Appeal from the 412th District Court
                           Brazoria County, Texas
                       Trial Court Cause No. 77417-CV

                 MEMORANDUM                      OPINION
      This appeal arises from a dispute between two homeowners’ associations.
Appellant Southwyck, Section IV Homeowners’ Association, Inc. (the “village
association”) sought to withdraw from an organizational structure that intertwined it
with appellee Southwyck Community Association, Inc. (the “master association”).
To advance this aim, the village association attempted to amend the associations’
governing instrument to effectuate its withdrawal. This appeal focuses on whether
 an amendment requires a majority vote from both the master and the village
 association or only from those individuals residing in the village association. We
 affirm the trial court’s November 20, 2015 final judgment because we conclude that
 an amendment to the associations’ governing instrument requires a majority vote
 from both associations. Likewise, we conclude that the trial court’s permanent
 injunction enforcing the governing instrument’s terms did not constitute an abuse of
 its discretion.

                                          BACKGROUND

I.      The Dual Southwyck Homeowners’ Associations
        The master association provides for the maintenance, preservation, and
 architectural control of the Southwyck subdivision in Brazoria County, Texas. The
 Southwyck subdivision is divided into three numbered sections1 and each numbered
 section is governed by a separate village association. Under this arrangement, each
 numbered section is ultimately managed by two homeowners’ associations — the
 master association and a village association.

        The dispute here is between the master association and the Section IV village
 association.      Both homeowners’ associations were formed in the Section IV
 Declaration of Covenants, Conditions and Restrictions. The Declaration states that
 the master association and the village association are intended to “jointly . . . provide
 for protection, maintenance, preservation and architectural control of the residential
 Lots and Village Common Areas.” Notwithstanding this cooperative arrangement,
 the Declaration is clear that the master association possesses greater authority in
 certain areas:

                If the village association fails or refuses to enforce any of the

        1
            The Southwyck subdivision is divided into Sections I, IV, and V.

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            Declaration’s restrictions, the master association has the right to
            enforce those restrictions and charge the village association all of its
            costs, expenses, and attorney’s fees incurred in securing enforcement.
           The master association’s architectural control committee has final
            authority over the village association’s architectural control committee
            regarding the approval of building plans and landscaping.
           In the event of a conflict regarding whether an amenity in the
            subdivision is considered a General Common Area or is specific to
            Section IV, the master association’s decision is final.
           The master association has the sole and exclusive right to collect
            maintenance assessment fees from residents of the Southwyck
            subdivision.
           Collected maintenance assessments are disbursed first to the master
            association with the remainder tendered to the village association.
The Declaration has governed the associations’ relationship since 1984.

      In 2014, members of the village association desired to withdraw from the
master association and establish an independent homeowners’ association. To
effectuate this change, the village association sought to amend the Declaration and
vest the management of Section IV solely in the village association. The Declaration
may be amended:

      [A]t any time when an instrument setting forth said changes and signed
      by those persons holding a majority of votes in the Village Association
      and the Master Association is placed on record in the real property
      records of Brazoria County, Texas.

The master association asserts that this provision requires that an amendment to the
Declaration be approved by a majority vote of the village association and a majority
vote of the broader master association. The village association contends that an
amendment to the Declaration requires a majority vote from only those individuals
who actually own a lot in Section IV.

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II.     The Underlying Action and the Trial Court Proceedings

        The master association filed suit against the village association on June 3,
  2014, requesting declaratory relief, a temporary restraining order, and a temporary
  and permanent injunction preventing the village association from unilaterally
  amending the Declaration without a majority vote from both the master association
  and the village association. The parties filed cross-motions for summary judgment.
  In its April 29, 2015 interlocutory order, the trial court granted in part the master
  association’s motion for traditional summary judgment and ruled in favor of the
  master association on its declaratory judgment claim.

        The trial court held a hearing on the master association’s request for
  permanent injunctive relief on July 20, 2015, and heard testimony from Scarlett
  Kutch, the village association’s board president. Ms. Kutch discussed the village
  association’s attempts to organize support for the amendment to the Declaration and
  its current state of proxy solicitation. Ms. Kutch testified that the village association
  had tried to “get rid of Southwyck [Master] Association . . . for over 20 years” and
  still “wish[ed] to amend” the Declaration to effectuate its withdrawal. According to
  Ms. Kutch, the village association had not made any attempts to reach out to
  members of the broader master association regarding the amendment. When asked
  about the trial court’s April 2015 order on the master association’s declaratory
  judgment claim, Ms. Kutch stated that she did not understand the order or its
  interpretation of the Declaration’s requirements to amend.

        Although Ms. Kutch indicated that the village association would not breach
  the trial court’s April 2015 order, the trial court noted that Ms. Kutch “may not
  forever be the person in charge of the [village] association; and the next person may
  or may not choose to take the same procedure.” The trial court concluded that the
  risk of filing an improper amendment to the Declaration was:
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      [T]oo great to take because even though there could be damages, those
      people that are harmed, it could be significant; and whether or not this
      association would have enough funds to pay all of those damages, I
      don’t know.

The trial court granted the master association’s request for a permanent injunction
and enjoined the village association from amending the Declaration without a
majority vote from both associations:

      [T]he Defendant and Defendant’s current and future officers, agents,
      servants, employees, and attorneys, and those persons in active concert
      or participation with Defendant who receive actual notice of this Order
      by personal service or otherwise, are hereby permanently enjoined from
      recording or attempting to record any document that amends or purports
      to amend or restate (or both amend and restate) the Declaration of
      Covenants, Conditions and Restrictions for Southwyck Section IV
      (“Section IV Declaration”) unless that document is signed by those
      persons holding a majority of votes in the Southwyck Community
      Association, Inc. (“Master Association”) and signed by those persons
      holding a majority of votes in the Southwyck, Section IV Homeowners’
      Association, Inc. (“Village Association”) . . . .

The village association challenges on appeal the traditional summary judgment
granted on the master association’s declaratory judgment claim and the trial court’s
permanent injunction.

                             STANDARDS OF REVIEW

      A declaratory judgment is intended “to settle and to afford relief from
uncertainty and insecurity with respect to rights, status, and other legal
relations . . . .” Tex. Civ. Prac. & Rem. Code Ann. § 37.002(b) (Vernon 2015). A
declaratory judgment rendered by summary judgment is reviewed under the
traditional summary judgment standards. In re M.M.M., 428 S.W.3d 389, 393 (Tex.
App.—Houston [14th Dist.] 2014, pet. denied).

      A summary judgment is reviewed de novo. Valence Operating Co. v. Dorsett,

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164 S.W.3d 656, 661 (Tex. 2005). When reviewing a summary judgment, we
examine the record in the light most favorable to the nonmoving party, indulging
every reasonable inference and resolving any doubts in the nonmoving party’s favor.
Cantey Hanger, LLP v. Byrd, 467 S.W.3d 477, 481 (Tex. 2015).

      For a traditional summary judgment, the moving party has the burden of
showing that there is no genuine issue of material fact and that it is entitled to
judgment as a matter of law. Tex. R. Civ. P. 166a(c); Byrd, 467 S.W.3d at 481.
When a plaintiff moves for a traditional summary judgment on a claim it asserts, it
must conclusively prove each element of its claim as a matter of law. Universal MRI
& Diagnostics, Inc. v. Med. Lien Mgmt. Inc., 497 S.W.3d 653, 658 (Tex. App.—
Houston [14th Dist.] 2016, no pet.). If the plaintiff satisfies this burden, the burden
shifts to the defendant to raise a genuine issue of material fact sufficient to defeat
summary judgment. Walker v. Harris, 924 S.W.2d 375, 377 (Tex. 1996).

      We review a trial court’s decision to grant a permanent injunction for an abuse
of discretion. Wiese v. Heathlake Cmty. Ass’n, Inc., 384 S.W.3d 395, 399 (Tex.
App.—Houston [14th Dist.] 2012, no pet.). A trial court abuses its discretion when
its decision is arbitrary or unreasonable, or when it acts without reference to any
guiding rules or principles. Samlowski v. Wooten, 332 S.W.3d 404, 410 (Tex. 2011).

                                      ANALYSIS

      The village association asserts on appeal that the trial court erred in declaring
that an amendment to the Declaration requires a majority vote from both the master
association and the village association. Under its interpretation of the Declaration,
the village association claims that an amendment requires a majority vote from only
those individuals who actually own a lot in Section IV. The village association also
challenges the trial court’s permanent injunction and contends that the injunction did

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 not resolve all issues related to the requirements for amending the Declaration.

I.     Amending the Declaration Requires a Majority Vote From Both the
       Master Association and the Village Association
       We review the trial court’s interpretation of a restrictive covenant de novo.
 Wiese, 384 S.W.3d at 400.

       Restrictive covenants in a deed are analyzed under the general rules of
 contract interpretation. Pilarcik v. Emmons, 966 S.W.2d 474, 478 (Tex. 1998).
 When reviewing a restrictive covenant, our primary goal is “to ascertain and give
 effect to the intent of its drafters, using the language of the instrument as our guide.”
 Wiese, 384 S.W.3d at 400. We analyze the covenant as a whole in light of the
 circumstances present at the time it was written, and afford words and phrases their
 commonly-accepted meaning. Wilmoth v. Wilcox, 734 S.W.2d 656, 657-58 (Tex.
 1987); Uptegraph v. Sandalwood Civic Club, 312 S.W.3d 918, 925 (Tex. App.—
 Houston [1st Dist.] 2010, no pet.). We consider “the entire writing in an effort to
 harmonize and give effect to all the provisions . . . so that none will be rendered
 meaningless.” J.M. Davidson, Inc. v. Webster, 128 S.W.3d 223, 229 (Tex. 2003).

       Whether a restrictive covenant is ambiguous is a question of law for the court
 to decide. Pilarcik, 966 S.W.2d at 478; Sanchez v. Southampton Civic Club, Inc.,
 367 S.W.3d 429, 434 (Tex. App.—Houston [14th Dist.] 2012, no pet.). A restrictive
 covenant is unambiguous if it can be given a definite or certain legal meaning.
 Sanchez, 367 S.W.3d at 434. In contrast, a covenant is ambiguous if its terms are
 susceptible to more than one reasonable interpretation. Wiese, 384 S.W.3d at 400.
 A covenant is not ambiguous simply because the parties disagree over its
 interpretation. Id.; Uptegraph, 312 S.W.3d at 926.

       The Declaration is unambiguous and may be amended only by “an instrument
 setting forth said changes and signed by those persons holding a majority of votes in

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the Village Association and the Master Association . . . .” The plain language of this
provision makes amending the Declaration contingent on securing both a majority
vote from the master association and a majority vote from the village association.

       This conclusion comports with an examination of the Declaration as a whole.
See Webster, 128 S.W.3d at 229; Wilmoth, 734 S.W.2d at 657-58; Uptegraph, 312
S.W.3d at 925. The Declaration establishes a collaborative arrangement between
the master association and the village association with the master association
occupying the dominant role.             For example, the Declaration vests the master
association with greater authority to resolve conflicts between the associations in the
areas of covenant enforcement, architectural control, and amenity designation. The
Declaration also provides that the master association alone can collect maintenance
fees from Southwyck residents; these fees are disbursed to the village association
only after the master association receives its allotted portion. In light of this
relationship, it is reasonable to read the Declaration’s amendment provision as
requiring a majority vote from both the master association and the village
association.

       The village association’s interpretation of the Declaration’s amendment
provision and its related sections fails to counter the instrument’s plain meaning.

       The Declaration states that ownership of a lot is required to vote as part of
either the master association or the village association.2 The village association
asserts that the Declaration’s definition of “lot” includes only those residential lots
within Section IV.3 The village association contends that, whether a vote is cast as

       2
         Those entitled to vote as part of the master association must own a lot subject to the master
association maintenance fee, which is assessed against all lots in the Southwyck subdivision.
Those entitled to vote as part of the village association must own a lot subject to the village
association maintenance fee, which is assessed against only those lots in Section IV.
       3
           The Section IV Declaration defines a “lot” as “any plot of land as described above or as
                                                  8
part of the master association or the village association, ownership of a lot in Section
IV is required to vote on an amendment to the Declaration.

       This proposed interpretation renders meaningless the Declaration’s
requirement that an amendment be approved by “those persons holding a majority
of votes in the Village Association and the Master Association . . . .” (emphasis
added). Had the drafters of the Declaration intended amendments to be solely within
the province of Section IV residents, they could have omitted altogether any mention
of the “Master Association” in the amendment provision.                    We aim to afford
consequence to each part of the Declaration and decline to adopt an interpretation of
the instrument that renders some of its terms meaningless. See Webster, 128 S.W.3d
at 229.

       The village association’s construction of the amendment provision and its
related sections is likewise at odds with other provisions in the Declaration that
depend upon a vote secured from the master association.                     For example, the
Declaration provides that the master association and the village association each
maintain an independent architectural control committee; each association can
independently change the membership of its architectural control committee through
a majority vote. If the Declaration made voting contingent upon ownership of a lot
in Section IV, then the master association’s architectural control committee — like
that belonging to the village association — would be subject to the control of only
those individuals who owned a lot in Section IV despite managing architecture for
the entire Southwyck subdivision and being vested with final authority over the
village association’s architectural committee.

       In short, the village association’s interpretation of the amendment provision

described in any replat thereof, and all plats or lots annexed pursuant to Section 1 of Article IX
hereof.”

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  and its related sections ignores the structure created by the Declaration to govern the
  associations’ integrated operations and the master association’s dominant role in the
  arrangement. In stark contrast to this scheme, the village association’s interpretation
  would permit the village association to withdraw from the master association-village
  association paradigm without any input or consent from the master association. The
  Declaration, considered as a whole, does not support this forced construction. See
  Wilmoth, 734 S.W.2d at 657-58; Uptegraph, 312 S.W.3d at 925.

        Challenging the trial court’s April 29, 2015 order granting in part the master
  association’s motion for summary judgment, the village association also asserts that
  the order does “not address who can vote on an amendment to the Southwyck
  Section IV Declaration.” The April 2015 order granted the master association’s
  declaratory judgment claim, which requested that the trial court declare that the
  village association cannot “unilaterally withdraw from the Master Association-
  Village Association paradigm” without an amendment approved by a majority of
  members in both the master association and the village association. By granting this
  request, the April 2015 order adequately addressed the requirements to amend the
  Declaration.

II.     The Trial Court Did Not Abuse Its Discretion in Granting the Master
        Association’s Request for a Permanent Injunction
        The purpose of injunctive relief “is to halt wrongful acts that are either
  threatened or in the course of accomplishment.” Wiese, 384 S.W.3d at 399.

        An application for injunctive relief must demonstrate the existence of (1) a
  wrongful act; (2) imminent harm; and (3) irreparable injury. Jim Rutherford Invs.,
  Inc. v. Terramar Beach Cmty. Ass’n, 25 S.W.3d 845, 849 (Tex. App.—Houston
  [14th Dist.] 2000, pet. denied). Entitlement to injunctive relief also requires that the
  movant lack an adequate remedy at law. Id. When an injunction is sought to enforce

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a covenant in a deed, the burden of proof is altered and the movant “is only required
to prove that the defendant intends to do an act that would breach the restrictive
covenant.” Id. Once granted, an injunction must be specific and describe in clear
and precise detail the acts sought to be restrained. See Tex. R. Civ. P. 683.

      The trial court’s permanent injunction did not constitute an abuse of its
discretion. Ms. Kutch’s testimony showed that preparations had been made to
mobilize voters in the village association with the aim of amending the Declaration.
Ms. Kutch also testified that the village association had not reached out to members
of the broader master association to secure their vote on the amendment. The trial
court concluded that an improper amendment to the Declaration would cause
significant harm to affected homeowners that would be difficult to remedy. The trial
court’s permanent injunction prevented this occurrence and enforced the
Declaration’s requirement that an amendment be signed by a majority of voters in
the master association and a majority of voters in the village association. See Jim
Rutherford Invs., Inc., 25 S.W.3d at 849.

      The village association also claims that the trial court’s permanent injunction
“left the issue of who can vote to amend the Southwyck Section IV Declaration up
in the air.” The injunction is clear that an amendment to the Declaration is prohibited
unless it is signed by a majority of voters in both the master association and the
village association. The injunction enjoins violations of this mandate by the current
and future village association administrations as well as those acting in conjunction
with the village association. The injunction is specific and describes in clear and
precise detail the individuals to whom it applies and the acts that it restrains. See
Tex. R. Civ. P. 683.

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                                  CONCLUSION

      We affirm the trial court’s November 20, 2015 final judgment and conclude
that (1) an amendment to the Declaration requires a majority vote from both the
master association and the village association; and (2) the trial court’s permanent
injunction enforcing the Declaration’s voting requirements did not constitute an
abuse of its discretion.

                                      /s/    William J. Boyce
                                             Justice

Panel consists of Justices Boyce, Jamison, and Brown.

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