Court Opinion

ID: 4510773
Source: CourtListenerOpinion
Date Created: 2020-02-27 10:11:50.177794+00
Date Added: 2024-06-11T09:10:31.926119
License: Public Domain

Fourth Court of Appeals
                                        San Antonio, Texas
                                 MEMORANDUM OPINION

                                          No. 04-19-00117-CV

                                    Clinton HABY and Heidi Haby,
                                             Appellants

                                                  v.

                     RIVER TRAIL PROPERTY OWNERS ASSOCIATION,
                                      Appellee

                    From the 451st Judicial District Court, Kendall County, Texas
                                       Trial Court No. 18-434
                            Honorable Kirsten Cohoon, Judge Presiding

Opinion by:       Irene Rios, Justice

Sitting:          Patricia O. Alvarez, Justice
                  Irene Rios, Justice
                  Beth Watkins, Justice

Delivered and Filed: February 26, 2020

AFFIRMED IN PART, REVERSED AND REMANDED IN PART

           In this appeal, property owners Clinton Haby and Heidi Haby (“the Habys”) argue the trial

court erred when it declared restrictive covenants on their property to be legally binding and

enforceable and ordered them to pay $10,000.00 in attorney’s fees to the River Trail Property

Owners Association. We affirm in part, and reverse and remand in part.

                                            BACKGROUND

           On August 26, 1974, the developer of the River Trail Subdivision in Kendall County,

Texas, signed an original declaration of covenants, conditions, and restrictions for the subdivision,
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which was subsequently recorded in the county deed records. The declaration stated that each

owner in the subdivision, by acceptance of a deed, agreed to pay the association annual

assessments to promote the recreation, health, safety, and welfare of the property owners and to

operate, improve, and maintain the common areas. The original declaration provided that it would

bind the land for thirty years from the date it was recorded, included a provision authorizing its

amendment, and set out the procedure for any such amendment.

       In August 2004, an amended declaration was recorded in the county deed records. The

amended declaration purported to extend the original declaration until August 26, 2024.

       In 2012, the Habys purchased real property in the River Trail Subdivision. In 2013, the

River Trail Property Owners Association (“the association”) assessed an annual assessment charge

against the Habys in the amount of $27.60, which the Habys paid. However, when the association

assessed annual assessment charges in 2014, 2015, 2016, 2017, and 2018, the Habys refused to

pay the charges.

       In August 2018, the Habys filed the underlying suit against the association, seeking a

declaratory judgment that (1) the original declaration of covenants, conditions, and restrictions had

not been validly extended, (2) the amended declaration was not a valid extension of the original

declaration, (3) the amended declaration was not binding on the Habys or their property, and (4)

the association had no right to charge the Habys for assessment charges or put a lien on their

property for unpaid charges. The association counterclaimed, seeking a declaration that the

amended declaration was valid and enforceable. Additionally, the association sought to recover

the Habys’ unpaid assessment charges and its attorney’s fees.

       The parties filed competing summary judgment motions on the validity and enforceability

of the amended declaration. In a no-evidence/traditional summary judgment motion, the Habys

argued (1) there was no evidence that the restrictive covenants at issue were amended in strict

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compliance with the amendment procedure set out in the original declaration, and (2) the evidence

conclusively proved that the declaration was not amended in strict compliance with the declaration.

The Habys further argued that because the restrictive covenants were not properly amended, they

expired by their own terms on August 26, 2004. The Habys’ summary judgment proof included

copies of the original declaration and the amended declaration.

       In a traditional summary judgment motion, the association argued it was entitled to

judgment as a matter of law because it had complied with the amendment procedure in the original

declaration. The association argued that the original declaration required (1) at least 75% of the

members to sign an instrument authorizing an amendment of the original declaration, and (2) the

recording of the amendment in the county deed records. The association’s summary judgment

proof included an affidavit from Kathleen Cassidy Goodman, the association’s former attorney. In

her affidavit, Goodman detailed the procedure she followed in amending the original declaration,

explaining that she had obtained written approval, in the form of proxy vote forms, from the

required percentage of association members, and then filed a different document, an amended

declaration signed by the association’s president, in the county deed records. Goodman also

pointed out the original declaration required “any amendment” to be recorded, but it did not require

the instrument signed by the members to be recorded.

       The Habys filed a response to the association’s summary judgment motion, in which they

adopted and incorporated the arguments in their summary judgment motion and further argued,

“[T]he summary judgment evidence clearly shows that the original [d]eclaration could only be

amended by an instrument in writing signed by the requisite number of owners, and that such an

amendment has to be filed.”

       The trial court granted the association’s summary judgment motion and denied the Habys’

summary judgment motion. In its judgment, the trial court declared that (1) the amended

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declaration of covenants, conditions, and restrictions was legally binding and enforceable, (2) the

association’s actions in executing and recording the amended declaration met the original

declaration’s amendment requirements, and (3) the association had the right to enforce the

amended declaration. The trial court also ordered the Habys to pay the association the sum of

$127.74 for their unpaid assessment charges and $10,000.00 in attorney’s fees. The Habys

appealed.

                          SUMMARY JUDGMENT STANDARD OF REVIEW

       We review a trial court’s ruling on a summary judgment motion de novo. Tarr v.

Timberwood Park Owners Assoc., Inc., 556 S.W.3d 274, 278 (Tex. 2018). To prevail on a

traditional summary judgment motion, the movant must show that no genuine issue of material

fact exists and that it is entitled to judgment as a matter of law. TEX. R. CIV. P. 166a(c); Provident

Life & Accident Ins. Co. v. Knott, 128 S.W.3d 211, 215-16 (Tex. 2003). In reviewing a trial court’s

summary judgment ruling, we take as true all evidence favorable to the nonmovant, indulging

every reasonable inference and resolving any doubts in the nonmovant’s favor. Knott, 128 S.W.3d

at 215. When competing summary judgment motions are filed, each movant has the burden of

establishing its entitlement to judgment as a matter of law. Tarr, 556 S.W.3d at 278. If the trial

court grants one motion and denies the other, then we consider all the evidence and determine all

questions presented. Sw. Bell Tel., L.P. v. Emmett, 459 S.W.3d 578, 583 (Tex. 2015).

                                  VALIDITY OF THE AMENDMENT

       In their first issue, the Habys argue the trial court erred in granting summary judgment in

favor of the association and in declaring the amended declaration legally binding and enforceable.

The Habys assert the association was not entitled to summary judgment because it did not comply

with the amendment procedure set out in the original declaration.

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        To resolve this issue, we must construe the amendment provision in the original

declaration, which provides:

        Section 7.3 Amendment The covenants and restrictions of this declaration shall
        run with and bind the land for a term of thirty (30) years from the date this
        declaration is recorded. This declaration may be amended during the first twenty
        (20) year period by an instrument signed by not less than ninety percent (90%) of
        each class 1 of members, and thereafter by an instrument signed by not less than
        seventy-five percent (75%) of each class of members. Any amendment must be
        recorded in the Deed Records of Kendall County, Texas.

The Habys argue, “The amendment procedure in the [original] [d]eclaration was not followed in

adoption of the [a]mended [d]eclaration because the [original] [d]eclaration provides that it can

only be amended by an instrument in writing and that the amendment must be recorded.” They

further argue: “The [a]mended [d]eclaration was not signed by the requisite number of members

. . . . It was instead signed only by the [a]ssociation’s [p]resident.” According to the Habys, “The

instrument to be signed constitutes the amendment, and that signed instrument must be filed in the

deed records.” Thus, the Habys urge us to construe section 7.3 as requiring the signing of an

instrument by the requisite percentage of members and the recording of the same signed instrument

in the county deed records.

        “A declaration containing restrictive covenants in a subdivision defines the rights and

obligations of property ownership, and the mutual and reciprocal obligation undertaken by all

purchasers in a subdivision ‘creates an inherent property interest possessed by each purchaser.’”

W. Hills Harbor Owners Ass’n v. Baker, 516 S.W.3d 215, 220 (Tex. App.—El Paso 2017, no pet.)

(quoting Inwood N. Homeowners’ Ass’n, Inc. v. Harris, 736 S.W.2d 632, 636 (Tex. 1987)).

Generally, the authority to amend restrictive covenants requires three conditions to be met: (1) the

declaration creating the original restrictions must establish both the right to amend and the method

1
 The original declaration created two classes of voting members, “Class A” and “Class B.” However, according to the
terms of the original declaration, these distinctions ceased to exist, at the latest, on January 1, 1979.

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of amendment; (2) the right to amend implies only changes contemplating a correction,

improvement, or reformation of the agreement, rather than the complete destruction of it; and (3)

the amendment must not be against public policy. Dyegard Land P’ship v. Hoover, 39 S.W.3d
300, 313 (Tex. App.—Fort Worth 2001, no pet.). Thus, restrictive covenants must be amended in

the “precise manner” authorized in the original declaration. Benders Landing Estates Prop.

Owners Ass’n, Inc. v. LGI Land, LLC, No. 09-16-00183-CV, 2018 WL 1188814, at *3 (Tex.

App.—Beaumont 2018, no pet.); Youssefzadeh v. Brown, 131 S.W.3d 641, 644-45 (Tex. App.—

Fort Worth 2004, no pet.).

       We review a trial court’s construction of a restrictive covenant de novo. Tarr, 556 S.W.3d

at 279. Courts treat unambiguous covenants as valid contracts between individuals. Id. at 280. Like

a contract, a covenant is ambiguous if it is susceptible to more than one reasonable interpretation

and unambiguous if it can be given a definite or certain legal meaning. Id. The fact that parties

disagree about the interpretation of a covenant does not mean it is ambiguous. Id. In construing a

restrictive covenant, our goal is to give effect to the drafter’s objective intent as reflected in the

language chosen. Id. Thus, we examine the restrictive covenant as a whole in light of the

circumstances present when the parties made the agreement, and we give the words used in the

restrictive covenant the meaning they commonly held when the covenant was written. Id. Courts

may not enlarge, extend, stretch, or change the words used in a restrictive covenant. Id. When a

restrictive covenant leaves a term undefined, we presume the parties intended its plain, generally

accepted meaning and give the term its ordinary meaning. See Epps v. Fowler, 351 S.W.3d 862,

866 (Tex. 2011).

       Neither the Habys nor the association assert that section 7.3 is ambiguous. We conclude

that section 7.3 is unambiguous. Section 7.3 states the original “declaration may be amended” “by

an instrument” signed by the requisite percentage of members. Section 7.3 further states, “[A]ny

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amendment must be recorded in the Deed Records . . . .” The original declaration does not define

the terms “instrument” or “amendment.” Courts often consult dictionaries to determine the natural

meaning of common-usage terms that are not defined in a restrictive covenant. See Epps, 351
S.W.3d at 866. The dictionary defines “instrument” as “a formal legal document,” and

“amendment” as “a change or addition to a document.” SHORTER OXFORD ENGLISH DICTIONARY

1399, 69 (6th Ed. 2007). After considering the provision as a whole, and without enlarging,

extending, stretching, or changing its words, we construe section 7.3 as requiring the requisite

percentage of members to sign a formal legal document expressing approval of any amendment;

however, it does not require the recording of that same signed document in the county deed records.

By its express terms, section 7.3 only requires the recording of the “amendment,” that is, the

change or addition to the original declaration. Such a construction gives effect to the drafter’s

objective intent as expressed in section 7.3’s language.

       Having construed the language of section 7.3, we now determine if the summary judgment

evidence established that the association complied with section 7.3’s amendment procedure. The

undisputed evidence showed that Goodman sent letters to each of the property owners in the

subdivision asking them to sign proxy vote forms indicating whether or not they agreed to amend

the original declaration by extending it for an additional twenty years. One hundred out of one

hundred twenty-one property owners (or eighty-three percent) signed and returned proxy vote

forms agreeing to amend and extend the declaration for an additional twenty years. The proxy vote

form signed by each of the property owners was the “instrument” (or “formal legal document”)

referenced in section 7.3 of the original declaration. See Hirdler v. Boyd, 702 S.W.2d 727, 731

(Tex. App.—San Antonio 1985, writ ref’d n.r.e.) (“An instrument is a legal document (such as a

bill, bond, deed, mortgage, lease, note, or will) which gives formal expression to a legal act or

agreement, or which creates, secures, modifies, or terminates a right.”). Goodman then prepared

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the amended declaration of covenants, conditions, and restrictions, and the board president,

Thomas Watson, signed the amended declaration in his capacity as the representative of the

members of the association on August 10, 2004. The amended declaration was recorded in the

Kendall County deed records. 2

         We conclude the evidence conclusively established the association’s compliance with the

original declaration’s amendment requirements. At least seventy-five percent of the members

signed “an instrument” authorizing the amendment, and then an amended declaration was recorded

in the county deed records. Because the association complied with the amendment procedure set

out in the original declaration, the amended declaration was legally binding and enforceable. We

hold that as to the declaratory judgment claims, the trial court did not err in granting the

association’s summary judgment motion and in denying the Habys’ summary judgment motion.

We overrule the Habys’ first issue. 3

                                                ATTORNEY’S FEES

         In its summary judgment motion, the association asked the trial court to award it reasonable

and necessary attorney’s fees in the amount of $16,000.00 pursuant to “the Texas Declaratory

Judgment Act and/or the Texas Property Code.” The association’s request for attorney’s fees was

supported by an affidavit from one of its attorneys. Attached to the Habys’ summary judgment

2
 Goodman testified in her affidavit: “While the Original Declaration required ‘any amendment’ to be recorded, it did
not require the instrument signed by the members to be recorded. Therefore, the Proxy Vote Form[,] namely the
instrument signed by the 100 lot owners who agreed to amend the Original Declaration, was not recorded.”
3
 The Habys’ brief contains other arguments concerning the granting of the association’s summary motion; however,
these arguments were not presented to the trial court. Because the other arguments were not presented to the trial court,
we cannot address them on appeal. See TEX. R. CIV. P. 166a(c) (“Issues not expressly presented to the trial court by
written motion, answer or other response shall not be considered on appeal as grounds for reversal.”); McConnell v.
Southside Indep. Sch. Dist., 858 S.W.2d 337, 341 (Tex. 1993) (“[I]ssues a non-movant contends avoid the movant’s
entitlement to summary judgment must be expressly presented by written answer to the motion or by other written
response to the motion . . . .”); Wyrick v. Bus. Bank of Tex., N.A., 577 S.W.3d 336, 353-54 (Tex. App.—Houston [14th
Dist.] 2019, no pet.) (“Even if we assumed that appellants’ appellate contentions had merit, they could not support a
reversal because appellants did not expressly present them in their summary judgment responses.”).

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response was an affidavit from their attorney stating that the amount of legal fees claimed by the

association was excessive and unreasonable. The trial court awarded the association attorney’s

fees in the amount of $10,000.00.

        In their second issue, the Habys argue the trial court erred in awarding attorney’s fees

because the association failed to comply with the mandatory requirements of section 209.0064(b)

of the Texas Property Code. However, the judgment reflects that the trial court granted the

association’s request for attorney’s fees “pursuant to Civil Practice & Remedies Code section

37.009,” not pursuant to the property code. Thus, the Habys’ argument fails to challenge the actual

basis for the attorney’s fees award. Because the Habys do not challenge the actual basis for the

attorney’s fees award, we overrule their second issue. See Kroger Co. v. Am. Alternative Ins. Corp.,

468 S.W.3d 766, 772 (Tex. App.—Houston [14th Dist.] 2015, no pet.) (overruling an appellate

issue when the appellants’ brief failed to present an argument challenging the basis for the trial

court’s ruling).

        In their third issue, the Habys argue the trial court erred in awarding the association

attorney’s fees because a genuine issue of material fact existed as to the reasonableness and

necessity of the association’s attorney’s fees. In response, the association contends the trial court

did not err because the affidavit submitted by the Habys’ attorney did not controvert its summary

judgment proof on attorney’s fees.

        To constitute proper summary judgment evidence, an affidavit must be made on personal

knowledge, set forth facts that would be admissible in evidence, and show the affiant’s

competence. AU Pharm., Inc. v. Boston, 986 S.W.2d 331, 338 (Tex. App.—Texarkana 1999, no

pet.); see TEX. R. CIV. P. 166a(f). According to the association, the affidavit submitted by the

Habys’ attorney did not properly controvert its summary judgment proof because it merely stated

that the amount of attorney’s fees claimed by the association was unreasonable because it was in

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excess of the Habys’ attorney’s fees. We disagree. The affidavit from the Habys’ attorney stated

his qualifications and that the contents of his affidavit were based on his personal knowledge.

Additionally, in the affidavit, the attorney testified that the $16,000.00 in legal fees claimed by the

association was excessive and unreasonable based on the limited work that had been done in this

case. The attorney further testified that there was no justification for the association’s legal fees

being twice those incurred by the Habys, especially given that the billing rate charged by the

association’s attorneys was lower than his billing rate. The attorney finally testified that there was

no reason for the association’s attorneys to have spent eighty hours on the case because there had

been no depositions, no mediation, and no hearings. We conclude the affidavit from the Habys’

attorney properly controverted the reasonableness and necessity of attorney’s fees claimed by the

association. See Affordable Motor Co., Inc. v. LNA, LLC, 351 S.W.3d 515, 522-23 (Tex. App.—

Dallas 2011, pet. denied) (holding the trial court erred in awarding attorney’s fees in a summary

judgment proceeding when the attorney’s fees were controverted by an affidavit from opposing

counsel opining that the fees claimed were excessive).

       “[T]he determination of the disputed fact issue of attorney’s fees [is] improper in a

summary judgment proceeding.” Wich v. Fleming, 652 S.W.2d 353, 358 (Tex. 1983) (opinion on

motion for rehearing). Because a genuine issue of material fact existed as to the reasonableness

and necessity of the association’s attorney’s fees, we conclude the trial court erred in granting

summary judgment in favor of the association on its claim for attorney’s fees. Therefore, we

sustain the Habys’ third issue.

                                            CONCLUSION

       Because the trial court erred in granting summary judgment on the association’s claim for

attorney’s fees, we reverse the part of its judgment granting the association $10,000.00 in

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attorney’s fees, and remand this case to the trial court for trial on the association’s claim for

attorney’s fees. We affirm the remainder of the judgment.

                                                       Irene Rios, Justice

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