Court Opinion

ID: 2895819
Source: CourtListenerOpinion
Date Created: 2015-09-08 00:01:35.71499+00
Date Added: 2024-06-11T12:46:11.498075
License: Public Domain

NO. 07-06-0305-CV

                            IN THE COURT OF APPEALS

                     FOR THE SEVENTH DISTRICT OF TEXAS

                                     AT AMARILLO

                                        PANEL A

                                  APRIL 12, 2007
                         ______________________________

                       JOSEPH C. GODDARD, III, APPELLANT

                                           V.

       NORTHHAMPTON HOMEOWNERS ASSOCIATION, INC., APPELLEE
                _________________________________

             FROM THE 288TH DISTRICT COURT OF BEXAR COUNTY;

           NO. 2005-CI-06424; HONORABLE KAREN H. POZZA, JUDGE
                     _______________________________

Before CAMPBELL and HANCOCK and PIRTLE, JJ.

                                        OPINION

      Appellant, Joseph C. Goddard, III (Goddard), appeals the denial of a motion to strike

deemed admissions; the granting of a summary judgment in favor of Northhampton

Homeowners Ass’n, Inc. (Homeowners); and the denial of a no-evidence summary

judgment filed by Goddard. We affirm.
                          Factual and Procedural Background

      In 1984, the developer of the Northhampton subdivision filed, in the deed records

of Bexar County, a Declaration of Covenants, Conditions, and Restriction and the By-laws

of the Northhampton Homeowners Association.           The Homeowners levied annual

assessments, payable in monthly installments, to cover the maintenance and needs of the

Homeowners’ management of the common grounds and other matters. In 2003, Goddard

purchased property within the subdivision. For calendar year 2003, the annual assessment

against the Goddard property was $480.00, payable at $40.00 per month. In 2004, the

Homeowners’s Board of Directors raised the annual assessment on the Goddard property

to $600.00, payable at $50.00 per month. Goddard attempted to pay the assessment by

payment of $40.00 per month; however, those checks were not accepted after March 2004

and were returned to Goddard. Subsequently, Homeowners filed suit attempting to

foreclose their lien for unpaid assessments, monetary damages for unpaid assessments,

and reasonable attorney fees.

      Goddard initially attempted to hire a person, who claimed to be an attorney, to file

an answer and represent Goddard throughout the litigation. Initial discovery was filed by

Homeowners, which included request for admissions. Some of the request for admissions

were not answered and were subsequently deemed admitted. Homeowners filed a first

motion for summary judgment that the trial court granted. Goddard belatedly learned that

the person he hired to represent him was not licensed to practice law and that that person

had not filed a response to Homeowners’s motion for summary judgment. Goddard hired

new licensed counsel and an agreed order granting a new trial was entered.

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      Subsequently, Homeowners filed a second motion for summary judgment arguing

that the annual assessment was proper and that, pursuant to the Declaration filed in the

deed records of Bexar County, Homeowners had a valid lien on the Goddard property.

Homeowners also alleged, in the motion for summary judgment, that the Board of Directors

of the Homeowners had the authority to set the annual assessment under the provision of

the Declaration and the By-Laws of the Homeowners, which are also filed in the deed

records of Bexar County.

      Goddard filed his reply alleging that the only way to raise the annual assessment

was pursuant to Article VI of the Declaration and that Homeowners had failed to provide

summary judgment evidence showing that the assessments were proper. Goddard then

filed a counterclaim alleging that Homeowners breached the restrictive covenants

contained in the Declaration, alleging that Homeowners committed an unspecified violation

of section 202.004 of the Texas Property Code, requesting for declaratory relief

determining whether two-thirds (2/3rds) of the property owners were required to approve

a raise in the annual assessment, and seeking an award of reasonable attorney fees.

Additionally, Goddard filed a no-evidence motion for summary judgment claiming that

Homeowners had failed to prove that they had properly raised the annual assessment.

Therefore, according to Goddard, he was entitled to judgment as a matter of law.

      The trial court granted Homeowners a partial summary judgment on the issue of the

assessments being due and unpaid, granted Homeowners a lien on the Goddard property,

and ruled that Homeowners were entitled to foreclose on the lien and sell the property.

The trial court subsequently granted a summary judgment on the issue of attorney fees for

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Homeowners in the amount of $4,000 through trial of the action and $5,000 for each level

of appeal through which the judgment may be reviewed.

       Goddard’s first issue contends that the trial court erred when it did not permit

Goddard to strike deemed admissions. However, we will not address this issue as we have

determined that the issue concerning the granting of Homeowners’s summary judgment

will obviate the necessity of addressing this issue. TEX . R. APP. P. 47.1.

                                   Summary Judgment

       Summary judgments are reviewed de novo. Valence Operating Co. v. Dorsett, 164
S.W.3d 656, 661 (Tex. 2005). When conducting a de novo review, we apply the following

standards in a traditional summary judgment:

       (1) The movant 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; (2) in
       deciding whether there is a disputed material fact issue precluding summary
       judgment, evidence favorable to the nonmovant will be taken as true; and (3)
       every reasonable inference must be indulged in favor of the nonmovant and
       any doubts must be resolved in favor of the nonmovant.

Am. Tobacco Co. v. Grinnell, 951 S.W.2d 420, 425 (Tex. 1997) (citing Nixon v. Mr. Prop.

Mgmt. Co., 690 S.W.2d 546, 548-49 (Tex. 1985)).       A no-evidence summary judgment is

essentially a pretrial directed verdict and we apply the same legal sufficiency standard in

reviewing a no-evidence summary judgment as we apply in reviewing a directed verdict.

See Aguirre v. S. Tex. Blood & Tissue Ctr., 2 S.W.3d 454, 456 (Tex.App.–San Antonio

1999, pet. denied); Roth v. FFP Operating Partners, L.P., 994 S.W.2d 190, 195

(Tex.App.–Amarillo 1999, pet. denied). We review the evidence in the light most favorable

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to the respondent against whom the no-evidence summary judgment was rendered,

disregarding all contrary evidence and inferences. Merrell Dow Pharms., Inc. v. Havner,

953 S.W.2d 706, 711 (Tex. 1997); Roth, 994 S.W.2d at 195. A no-evidence summary

judgment is improperly granted if the non-movant presents more than a scintilla of

probative evidence to raise a genuine issue of material fact. Roth, 994 S.W.2d at 195.

When both parties move for summary judgment and the trial court grants one motion and

denies the other, the appellate court reviews the summary judgment evidence of both

parties, determines all questions presented, and renders the judgment that the trial court

should have rendered. Bradley v. State ex rel. White, 990 S.W.2d 245, 247 (Tex. 1999).

       Homeowners’s summary judgment alleges that the assessment for the annual dues

was properly set by the Board of Directors of Homeowners. Specifically, Homeowners

contends that, when the Declaration provisions are read in conjunction with the By-Laws,

the Board of Directors has the authority to set the annual assessment. Goddard counters

that Article VI, sections 3 and 5 of the Declaration must be read to require approval by

two-thirds (2/3rds) of the owners of property within the Northhampton subdivision to raise

the annual assessment.

       In analyzing the competing propositions, we must keep in mind that, when we are

construing the restrictive covenants, the Declaration provisions are subject to the general

rules of contract construction. See Pilarcik v. Emmons, 966 S.W.2d 474, 478 (Tex. 1998).

In construing the language of the restrictive covenants, our task is to determine the intent

of its framers. See Wilmoth v. Wilcox, 734 S.W.2d 656, 658 (Tex. 1987). Whether the

relevant language is ambiguous is a question of law. See Pilarcik, 966 S.W.2d at 478.

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Covenants, like contracts, are unambiguous as a matter of law if they can be given a

definite or certain legal meaning. Grain Dealers Mut. Ins. Co. v. McKee, 943 S.W.2d 455,

458 (Tex. 1997). We are cautioned to use the words and phrases contained in the

covenants in their generally accepted meaning. See Wilmoth, 734 S.W.2d at 657-58.

      To support its motion for summary judgment, not including the issue of attorney

fees, Homeowners presented the trial court with the following summary judgment evidence:

      1) Declaration of Covenants, Conditions and Restrictions for Northhampton
      filed in Volume 3056, page 1125, Official Public Records of Real Property of
      Bexar County, Texas;
      2) Bylaws of Northhampton Homeowners Association, recorded in Volume
      3344, page 82, Official Public Records of Real Property of Bexar County,
      Texas;
      3) Defendant’s Responses to Plaintiff’s Interrogatories; and
      4) Affidavit of Barbara Lowry.

As both Homeowners and Goddard point to Article VI, sections 3 and 5 of the Declaration,

a review of these provisions is warranted.

                                       ARTICLE VI

                  COVENANT FOR MAINTENANCE ASSESSMENT

             Section 3. Basis and Maximum of Annual Assessment. Until the year
      beginning January 1, 1985, the maximum annual assessment for a duplex
      shall be Three Hundred and no/100 Dollars ($300.00) per year, and the
      maximum annual assessment for a fourplex shall be Six Hundred and
      no/100 Dollars ($600.00) per year.

             The Board of Directors of the Association may, after consideration of
      current maintenance costs and future needs of the Association, fix the
      annual assessment for any year at a lesser amount.

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              Section 5. Change in Basis and Maximum of Annual Assessments.
       Subject to the limitations of Section 3 hereof, and for the periods therein
       specified, the Association may change the maximum and basis of the
       assessments fixed by Section 3 hereof prospectively for any such period
       provided that any such change shall have the assent of two-thirds (2/3) of the
       votes of each class of Members who are voting in person or by proxy, at a
       meeting duly called for this purpose, written notice of which shall be sent to
       all Members at least thirty (30) days in advance and shall set forth the
       purpose of the meeting.

       When reading the two provisions together, it is apparant that section 3 applies until

January 1, 1985, to limit the amount of the assessments to the sums indicated. Section

5 is applicable, subject to section 3, for the periods specified in section 3. In other words,

until January 1, 1985, the only way that the annual assessment could be raised is with a

two-third (2/3) vote of each class of the members voting in person or by proxy. The net

affect of this construction is that section 5 ceased to be operational on January 1, 1985.

This appears, at first blush, to be inconsistent with an intent to have a viable homeowners

association. However, when viewed in the overall scheme, as demonstrated in the

Declaration and By-laws, this interpretation results in a fully operative homeowners

association. Initially, there were two classes of membership, Class A and Class B. Each

had voting privileges. Class A was all owners, with the exception of the developer, and

each owner had one vote for each residential parcel owned. Class B membership was

granted to the developer, as defined in the Declaration. Class B was entitled to three votes

for each residential parcel owned and was converted to Class A membership upon the

earlier of: 1) when the total votes outstanding in the Class A equal the total votes

outstanding in the Class B membership; or 2) on December 31, 1984. When placed in

context, it becomes clear that the purpose of sections 3 and 5 was to lock the initial

                                              7
assessment down to the amount specified in the Declaration, for the period of time

specified, unless two-thirds (2/3rds) vote of all members was received to raise the

assessment.

       How then could the Homeowners raise the annual assessment after December 31,

1984? To answer that inquiry, we must look to both the Declaration and to the Bylaws.

Article VI, section 9 of the Declaration provides that the Board of Directors of the

Homeowners shall fix the date for the commencement of the assessment. The Board is

required to send notice of the annual assessment to each owner of a residential parcel

located within the development. A review of the By-laws reflects that pursuant to Article

VIII section 1 (b) the Board of Directors has to power “to establish, levy, assess and collect

the assessments or charges provided in Article III. . . .” Article III of the By-laws provides

that every person who is a record owner of a residential parcel subject to the Declaration

is a member of the Homeowners. Further, the rights of membership are subject to

payment of the annual and special assessments levied by the Homeowners.

       A review of the Texas Property Code reveals that Chapter 202,1 Construction And

Enforcement Of Restrictive Covenants, contains the following terms:

       “Dedicatory instrument” means each governing instrument covering the
       establishment, maintenance, and operation of a residential subdivision, . . . .
       The term includes a declaration or similar instrument subjecting the real
       property to restrictive covenants, bylaws, or similar instruments governing the
       administration or operation of a property owners’ association . . . .

       1
        Neither party is arguing that the provisions of the Texas Property Code are not
applicable to this subdivision.

                                              8
      “Restrictive covenant” means any covenant, condition, or restriction
      contained in a dedicatory instrument, whether mandatory, prohibitive,
      permissive, or administrative.

TEX . PROP. CODE ANN . § 202.001(1) (Vernon 2007).        Homeowners proved that the

dedicatory instrument was filed in the property records of Bexar County. The By-laws of

the Homeowners were also filed in the property records of Bexar County and, under the

terms of the statute, become part of the dedicatory instruments that control the operation

of the Homeowners. Goddard has not challenged the validity of any of the dedicatory

instruments, rather his position is that only the dedication document controls. For the

reasons stated above, we have rejected that viewpoint. When all of the dedicatory

instruments are viewed collectively, the correctness of the trial court’s granting of the

Homeowners’s summary judgment is apparent. Accordingly, we overrule Goddard’s

second contention that the trial court erred in granting Homeowners’s summary judgment.

      Based upon our view that the trial court was correct in granting Homeowners’s

summary judgment, we cannot say it was error to overrule Goddard’s no-evidence motion

for summary judgment. A construction of the rights of Homeowners consistent with the

grant of its summary judgment precludes a granting of Goddard’s summary judgment.

Accordingly, Goddard’s third contention is overruled.

                                            9
                                Conclusion

Having overruled Goddard’s contentions, the judgment of the trial court is affirmed.

                                   Mackey K. Hancock
                                       Justice

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