Court Opinion

ID: 6342087
Source: CourtListenerOpinion
Date Created: 2022-05-19 08:13:13.362438+00
Date Added: 2024-06-11T09:16:52.084118
License: Public Domain

In The
                            Court of Appeals
                   Seventh District of Texas at Amarillo

                                  No. 07-21-00239-CV

                          MARK FRIEDMAN, APPELLANT

                                          V.

                      SECOND CONGRESS, LTD., APPELLEE

                         On Appeal from the 345th District Court
                                  Travis County, Texas
        Trial Court No. D-1-GN-19-003283, Honorable Madeleine Connor, Presiding

                                    May 18, 2022
                          MEMORANDUM OPINION
                    Before QUINN, C.J., and PARKER and DOSS, JJ.

      This case involves a party demanding reimbursement for, or a refund of, expenses

he never paid. The party demanding same is Mark Friedman. He appeals from a final

summary judgment awarding to Second Congress, LTD a refund of excess special

assessments Second Congress paid prior to selling condominium Unit 46TX to Friedman.

At bar, Friedman maintains that he is entitled to the refund because the conveyance

contract did not say otherwise and the right to same was an appurtenance to realty

transferred via the deed. Furthermore, his receipt of monies another paid would not
unjustly enrich him, he continues. To the extent the trial court decided otherwise by

awarding the refund to Second Congress, it purportedly erred. We affirm the trial court’s

summary judgment.1

        Background

        When Friedman purchased Unit 46TX at the Austonian, a luxury high-rise

condominium building in Austin, for over $5 million, there was ongoing litigation

concerning balconies and ledges on the building. As a consequence of the litigation, the

Austonian Condominium Association (ACA) had levied special assessments to defray the

cost of litigation. Unit owners paid the special assessments on a pro rata basis.

        Because Second Congress owned Unit 46TX, among other units, at the time the

assessments were first levied, it paid the first assessment of $2,977.20 in October 2015.

ACA levied an additional $11,970 in assessments against Second Congress, which the

latter also paid. Thereafter, Friedman and Second Congress executed a contract for the

sale, which contract we refer to as the Purchase Agreement.                        At closing, Second

Congress paid $4,932 in anticipation of a forthcoming April 2017 special assessment and

another $4,932 for an anticipated assessment in July 2017. All told, Second Congress

paid $23,938.20 in special assessments related to the balcony litigation. Not all of the

funds garnered from the assessments were expended in resolving the balcony litigation.

The question became to whom would the pro rata share of the unexpended balance be

refunded, Second Congress or Friedman. That share approximated $12,000. ACA

expressed its intent to refund all previously paid assessments to the current unit owners.

         1 Because this appeal was transferred from the Third Court of Appeals, we are obligated to apply

its precedent when available in the event of a conflict between the precedents of that court and this Court.
See TEX. R. APP. P. 41.3.
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That resulted in Second Congress seeking declaratory relief entitling it to the refund of

monies it paid. Friedman moved for summary judgment, maintaining that the Purchase

Agreement must be construed to mean that the refund was his. This was purportedly so

because Second Congress did not reserve a right to receive any refund of the

assessments it paid. Instead, the right to the refund allegedly passed to Friedman via

the warranty deed Second Congress executed.

        Second Congress moved for summary judgment as well, characterizing the right

to receive the refund as “a monetary interest,” or personalty. As such, they were not

conveyed incidentally to conveying the condo, it argued.

        Issue One: Right to the Refund

        Friedman maintains that the right to receive the refund is appurtenant to the

property and runs with the property. He now cites to the condominium declaration in

support of his position. Yet, the tenor of his argument below generally consisted of his

proposing that Second Congress could have reserved its right to receive the refund in the

Purchase Agreement, but since it did not, refund of the pre-sale assessments belong to

him.2 He also alluded to the refund being an appurtenance, which allusion appeared in

response to the motion for summary judgment of Second Congress. Nevertheless, in

mentioning that topic, he said nothing about the condominium declaration and how it

purportedly made the refunds an appurtenance. Not until appeal did he urge that position.

Moreover, perusal of the summary judgment record discloses that no one included the

          2 Such negotiations occurred regarding the return of assessments paid after completion of the sale.

That is, Second Congress agreed to place $200,000 in escrow to cover future assessments related to the
litigation. Any unexpended balance would be returned to it, according to the Purchase Agreement.
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declaration in the evidence presented the trial court. Given that omission, Friedman

attached it to his appellate brief as Exhibit B.

       A summary judgment “must stand or fall on the grounds expressly presented” to

the trial court in the motion or response thereto. See Adame v. Vista Bank, No. 07-14-

00098-CV, 2014 Tex. App. LEXIS 12227, at *4 (Tex. App.—Amarillo Nov. 10, 2014, no

pet.) (mem. op.). Similarly, we must limit our review of the trial court’s decision to the

record actually before that court. See id. Consequently, this standard bars us from

considering both the declaration underlying Friedman’s current appurtenance argument

and the argument itself.

       That leaves us with his appurtenance argument raised below. We assume that it

may be encompassed within a liberal interpretation of his current position.         And, it

consisted of postulating that “[a]n obligation to pay assessments to the Austonian

Condominium Association (the Association) is an appurtenance to the Unit because it is

an obligation that encumbers the Unit” and “[s]imilarly, a right to receive reimbursements

of assessment funds that are allocated to the Unit is an appurtenance to the Unit because

it’s a right that benefits the owner of the Unit.” We find that argument wanting for several

reasons.

       First, no evidence within the current summary judgment record illustrates that “the

Association” had an obligation to refund the assessment or “reimburse” anyone. Without

an obligation to reimburse, reimbursement can hardly be deemed either a property right

or interest that follows ownership of the realty or a benefit attendant to ownership.

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        Second, and more importantly, Friedman’s own argument denudes it of viability. 3

This is so because its foundation lies on the concept of “reimbursement.”

“Reimbursement” denotes repaying someone for monies the individual spent or expenses

he paid. A claimant who did neither, such as Friedman, falls outside that scope. As said

in MHI P’ship v. City of League City, 525 S.W.3d 370 (Tex. App.—Houston [14th] 2017,

no pet.), “[p]aying money from the excess-assessment fund to a property owner who did

not make any special-assessment payments is not a ‘refund.’” Id. at 379. Rather, “[i]t is

a windfall.” Id. No less is true for “reimbursement” since both encompass the same

element, i.e., recouping what the claimant gave or paid. The MHI court continued by then

holding that “[t]hough property owners paid special assessments based on their

ownership of a property and though the assessment was enforceable by a lien against

that property, these facts do not mean that the interest in a potential refund of excess

assessment payments is an interest in the property that passes with the land to the current

owner of the property.” Id. “[I]nterests in potential refunds of excess assessments

[instead] are personal rights belonging to the ones who actually paid the assessments,

without regard to whether they own the properties at the time of the refunds.” 4 Id. We

find no fault in that legal conclusion and its underlying logic.

        Again, “reimbursement” means repaying someone for monies the individual spent

or expenses he paid. Friedman did neither. And, money being personal property, see

        3This same reason also nullifies the viability of his general argument concerning the effect of
mentioning nothing in the Purchase Agreement about recouping prior assessments.

        4Friedman tries to distinguish MHI by suggesting that a municipal ordinance and tax (as opposed
to a condo assessment) were involved there. Those are distinctions without a difference. Neither
circumstance controlled the topic of who was to receive excess monies paid. Instead, the court relied on
common sense, persuasive authority from outside Texas, and what the concept of a “refund” means.
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Whiteselle v. Jones, 39 S.W. 405, 405 (Tex. Civ. App.—San Antonio 1897, no writ), the

reimbursement of it did not pass from Second Congress to him via the deed, unless

expressly conveyed therein. See Aery v. Hoskins, Inc., 493 S.W.3d 684, 700–01 (Tex.

App.—San Antonio 2016, pet. denied) (stating that a general warranty deed does not

pass any right held by the grantor that is personal as opposed to real). No one cites us

to anything within the deed to the condo (or the Purchase Agreement) expressly

addressing the return of special assessments paid prior to the sale.

       We overrule Friedman’s first issue. That relieves us from addressing his second

which concerns unjust enrichment. And, in so overruling the issue, we also affirm the trial

court’s summary judgment.

                                                        Brian Quinn
                                                        Chief Justice

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