Court Opinion

ID: 4468972
Source: CourtListenerOpinion
Date Created: 2020-01-02 15:09:51.756219+00
Date Added: 2024-06-11T08:48:50.284643
License: Public Domain

Fourth Court of Appeals
                                      San Antonio, Texas
                                  MEMORANDUM OPINION

                                         No. 04-19-00209-CV

SCHERTZ BANCSHARES CORPORATION, Individually and d/b/a Schertz Bank & Trust,
     Schertz Bank & Trust, and Mustang Valley Estates Homeowners Association,
                                    Appellants

                                                   v.

  Scott BURRIS, Ashley Burris, Wayne Burris, Lee Burris, Kenneth Davis, Cece Davis, Amy
   Wilson, Mike Wilson, Daryl Green, Cathy Green, Ken Helgren, Michele Helgren, Robert
  Hudson, Cliff Jackson, Mamie Jackson, William Merrill, Tonya Spells, Quinton Perry, Angie
  Perry, Kenneth Shields, Tamara Shields, Latoya Siples, Clinton Siples, and Michelle Siples,
                                          Appellees

                    From the 25th Judicial District Court, Guadalupe County, Texas
                                     Trial Court No. 12-1512-CV
                               Honorable William Old, Judge Presiding

Opinion by:       Rebeca C. Martinez, Justice

Sitting:          Rebeca C. Martinez, Justice
                  Patricia O. Alvarez, Justice
                  Beth Watkins, Justice

Delivered and Filed: January 2, 2020

AFFIRMED IN PART AND REMANDED; REVERSED IN PART AND RENDERED

           The issue in this interlocutory appeal is whether appellees have standing to pursue a claim

to enforce deed restrictions as well as claims for damages for the costs to construct and maintain

common areas in a subdivision. We hold that appellees have standing to pursue only their

enforcement claim. Therefore, we render judgment dismissing all of appellees’ claims other than
                                                                                         04-19-00209-CV

their enforcement claim, and we remand the cause for further proceedings consistent with this

opinion.

                                             BACKGROUND 1

           Santex Builders, LLC (Santex) developed a small residential subdivision in Guadalupe

County, Texas, financed by Schertz Bank & Trust (SBT). Santex filed a plat and a declaration of

covenants and restrictions in the real property records in connection with the development. The

plat shows fifteen lots designated for homes and three lots reserved for “common areas.” Two of

the common-area lots are at the entrance to the subdivision; the third is a private street running

through the subdivision. The plat provides for a gate at the entrance to be built on the common

areas and states that the common-area lots will be owned and maintained by a homeowners’

association. The declaration provides that Santex, or its successors and assigns, will deed the

common-area lots to a homeowners’ association, and the declaration gives the homeowners’

association the responsibility to manage and financially support the common areas.

           Santex sold several lots in the subdivision but eventually defaulted on its loan. Thereafter,

SBT foreclosed on the unsold lots and the common-area lots. After foreclosure, Santex assigned

its rights and powers under the declaration to SBT, and SBT purported to accept the assignment

as to rights and powers but not as to Santex’s liabilities. SBT then sold several remaining lots in

the subdivision and sent a “Letter of Understanding” to lot purchasers, in which SBT agreed to

construct an entry gate for the subdivision. SBT also formed a homeowners’ association, as

contemplated by the declaration. Consistent with the plat and declaration, SBT conveyed the

common-area lots to the newly-formed homeowners’ association.

1
    The dispositive facts are undisputed.

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                                                                                                  04-19-00209-CV

        Appellees, who are homeowners in the subdivision, sued SBT, SBT’s holding company,

and the homeowners’ association alleging that SBT failed to build a compliant entry gate and

maintain the private street. 2 Appellees assert claims for negligence, fraud, violations of the Texas

Deceptive Trade Practices Act, breach of fiduciary duty, and conspiracy. They seek damages in

the amount of the costs to construct an entry gate and repave the private street. Appellees also

assert a claim to enforce the plat and declaration obligations. 3

        Appellants are SBT, SBT’s holding company, and the homeowners’ association. They

filed a plea to the jurisdiction and a motion for summary judgment, which, in part, reasserts

appellants’ jurisdictional arguments. Appellants argue that appellees lack standing to pursue their

claims and, consequently, the trial court lacks subject-matter jurisdiction. The trial court denied

appellants’ plea and motion and granted permission for appellants to take an interlocutory appeal

on the standing issue. This appeal followed.

                             STANDARD OF REVIEW AND APPLICABLE LAW

        Standing is a component of subject-matter jurisdiction that cannot be waived. Tex. Ass’n

of Bus. v. Tex. Air Control Bd., 852 S.W.2d 440, 445 (Tex. 1993). Whether the pleadings have

alleged facts that affirmatively demonstrate subject-matter jurisdiction and whether undisputed

evidence of jurisdictional facts establishes subject-matter jurisdiction are questions of law that we

review de novo. Tex. Dep’t of Parks & Wildlife v. Miranda, 133 S.W.3d 217, 226 (Tex. 2004).

        When the issue of standing is before the court, we must analyze the standing of each

individual to bring each individual claim. Heckman v. Williamson Cty., 369 S.W.3d 137, 152–53,

2
  Appellees include only those homeowners who purchased after SBT’s foreclosure because the trial court dismissed
those homeowners who purchased prior to foreclosure.
3
  Appellants contend that appellees seek only money damages for repair and construction of improvements to common
areas; however, appellees also specifically pled an enforcement action. Appellees assert in their petition they “sue
seeking enforcement of the plat and deed restrictions,” and they point to the provisions in the plat requiring the
homeowners’ association to maintain the private street and entry gate.

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                                                                                                 04-19-00209-CV

155 (Tex. 2012). Each plaintiff must demonstrate standing separately for each form of relief

sought. Id. at 155. An exception applies where multiple plaintiffs sue individually for injunctive

or declaratory relief. Id. at 152 n.64. In such a case, the trial court must only assure itself that one

plaintiff has standing to pursue as much or more relief than any of the other plaintiffs. See id.

        “A person has standing to sue when he is personally aggrieved by the alleged wrong.”

Nauslar v. Coors Brewing Co., 170 S.W.3d 242, 249 (Tex. App.—Dallas 2005, no pet.) (citing

Nootsie Ltd. v. Williamson Cty. Appraisal Dist., 925 S.W.2d 659, 661 (Tex. 1996)). “It is well-

settled that an individual stakeholder in a legal entity does not have a right to recover personally

for harms done to the legal entity.” Siddiqui v. Fancy Bites, LLC, 504 S.W.3d 349, 360 (Tex.

App.—Houston [14th Dist.] 2016, pet. denied). “It is the nature of the wrong, whether directed

against the entity only or against the individual stakeholder, and not the existence of injury, that

determines who may sue.” Id.

                                                 DISCUSSION

        We must address standing as to each claim and each form of relief sought. See Heckman,
369 S.W.3d at 152–53, 155. We first address those claims seeking damages for the costs to

construct an entry gate and to repave the private street. 4 All of appellees’ claims seek this measure

of damages other than appellees’ enforcement claim, which we consider separately below.

Appellants argue that appellees lack standing because their claims concern an injury to the

common areas and only the homeowners’ association, as owner of the common areas, can seek

redress for an injury to the common areas. We agree.

4
 According to appellees’ brief: “The damages sought by [appellees] are damages to property in the subdivision that
exists for the property owners[’] benefit.” Appellees do not seek individualized damages based on personal harm to
any homeowner.

                                                      -4-
                                                                                    04-19-00209-CV

       An individual stakeholder does not have a right to recover for harms done to a legal entity.

See Wingate v. Hajdik, 795 S.W.2d 717, 719 (Tex. 1990) (“A corporate stockholder cannot recover

damages personally for a wrong done solely to the corporation, even though he may be injured by

that wrong.”); Siddiqui, 504 S.W.3d at 360 (holding a partner lacked standing to recover for

damages sustained by a partnership). We have applied this rule—and a corresponding rule

applicable to joint tenancy—to prohibit a condominium owner from suing for harm to common

elements of the condominium building without joining cotenants. See Myer v. Cuevas, 119 S.W.3d
830, 835 (Tex. App.—San Antonio 2003, no pet.). Here, the private street and entryway are

located on common areas belonging to the homeowners’ association. The appellees, as subdivision

homeowners, have no individual property rights in the common areas, and, without a direct

ownership interest, appellees have no standing to sue for damages to the common areas. See

Wingate, 795 S.W.2d at 719; Mitchell v. LaFlamme, 60 S.W.3d 123, 128 (Tex. App.—Houston

[14th Dist.] 2000, no pet.) (holding that recovery for damages done to common areas by a

townhome association’s failure to maintain the common areas belonged solely to the townhome

association and unit owners could not sue for damages).

       However, the rule that members of a legal entity cannot recover damages personally for

wrong done solely to the entity does not prohibit a member from recovering for wrongs done to

the member individually in violation of a duty arising from contract or otherwise. See Wingate,
795 S.W.2d at 719. Here, the declaration provides: “The right to enforce these provisions by

injunction . . . is hereby vested in each owner of a lot in this subdivision, and in the Homeowners

Association, its successors and assigns.” In addition, SBT agreed in a “Letter of Understanding”

to construct an entry gate for the subdivision. Under these circumstances, individual homeowners

may have contractual rights to enforce plat and declaration obligations that are owed to the

homeowners individually. Accordingly, appellees have standing to pursue their enforcement claim

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                                                                                     04-19-00209-CV

based on personal enforcement rights. See Wingate, 795 S.W.2d at 719; Houston Laureate

Assocs., Ltd. v. Russell, 504 S.W.3d 550, 557–58 (Tex. App.—Houston [14th Dist.] 2016, no pet.)

(holding that easement agreement conferred upon individual homeowners the contractual right to

use an easement and that homeowners had standing to sue for injunctive relief to use the easement);

cf. Myer, 119 S.W.3d at 836 (determining trial court did not err in dismissing complaints about

violations of the declarations and bylaws of a condominium regime because the documents were

not presented to the trial court). We do not decide the nature and extent of any enforcement rights

appellees may have, but decide only that appellees have standing to pursue an enforcement claim.

                                          CONCLUSION

       For the forgoing reasons, appellees lack standing to pursue their claims to recover for

damages to the common areas. Therefore, the trial court erred in denying the appellants’ plea to

the jurisdiction and motion for summary judgment as to those claims, and we render judgment

dismissing those claims for lack of subject-matter jurisdiction. See TEX. R. APP. P. 43.3 (rendition

appropriate unless remand necessary). We hold that appellees only have standing to pursue their

enforcement claim. Therefore, the trial court did not err by denying appellants’ plea to the

jurisdiction and motion for summary judgment as to appellees’ enforcement claim. We remand

the cause for further proceedings consistent with this opinion.

                                                 Rebeca C. Martinez, Justice

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