Alistair A. Tees and Nancy Tees v. East Lake Woods Homeowners Association ( 2006 )

Chief Justice Clerk
James T. Worthen Cathy S. Lusk
Twelfth Court of Appeals
Justices Chief Staff atti irney
Sam Griffith Margaret Hussey
Diane DeVasto
Wednesday, January 18, 2006
Mr. John F. Berry Mr. Randall J. Cook
John F. Berry, P.C. Hardy & Atherton
100 Independence Place One American Center, Suite 750
Suite 400 909 ESE Loop 323
Tyler, TX 75703 Tyler, TX 75701
RE: Case Number: 12-04-00020-CV
Trial Court Case Number: 46,800
Style: Alistair A. Tees and Nancy Tees
v.
East Lake Woods Homeowners Association
Enclosed is a copy of the Memorandum Opinion issued this date in the above styled and
numbered cause. Also enclosed is a copy of the court's judgment.
Very truly yours,
CATHY S. LUSK, CLERK
Bv: -KWjiA. MfiMl
Katrina McClenny, Chief Deputy Clerk
CC: Hon. John Ovard
Hon. Thomas A. Dunn
Ms. Judy Carnes
1517 West Front Street • Suite 354 • Tyler, TX 75702 • Tel: 903-593-8471 • Fax: 903-593-2193
Serving Anderson. Angelina, Cherokee, Gregg, Henderson, Houston, Nacogdoches. Hains. Husk. Sabine, San Augustine, Shelby, Smith. Trinity, I pshur,
Van Zandt and Wood Counties
www.12thcoa.courts.state.tx.us
NO. 12-04-00020-CV
IN THE COURT OF APPEALS
TWELFTH COURT OF APPEALS DISTRICT
TYLER, TEXAS
ALISTAIR A. TEES AND NANCY TEES, § APPEAL FROM THE
APPELLANTS
V. COUNTY COURT AT LA W
EAST LAKE WOODS HOMEOWNERS
ASSOCIATION,
APPELLEE SMITH COUNTY, TEXAS
MEMORANDUM OPINION
Alistair and Nancy Tees appeal from an adverse judgment entered after a trial before the court
in a suit filed by East Lake Woods Homeowners Association in which the court found the Tees in
violation of a restrictive covenant. The Tees assert six issues concerning limitations, conditions
precedent, the sufficiency of the evidence, attorney's fees, and the trial court's denial of their request
for a declaratory judgment. We modify the trial court's judgment to delete the dates for performance
recited therein and affirm the trial court's judgment as modified.
Background
Mark Mahaffey, a real estate developer, established a residential subdivision called East Lake
Woods. All property in the subdivision is sold subject to deed restrictions that set the standards for
the community as described in a lengthy document entitled "Declaration of Covenants, Conditions,
Assessments, Charges, Servitudes, Liens, Reservations and Easements (Single Family) for East Lake
Woods Unit JX a part of the Nancy L. Mulkey Survey, Abstract 695, Smith County, Texas." Article
3.09 of that document provides: "With reasonable diligence, and in all events within nine (9) months
from the commencement of construction, unless completion is prevented by war, labor strike or by an
act of God, any dwelling unit or other structure commenced upon any lot shall be completed as to its
exterior and all temporary structures shall be removed."
On February 21,1997, the Tees purchased Lot 39 in that subdivision. The Tees and Mahaffey,
in the capacity of the subdivision's Architectural Review Committee, signed a document entitled
"Design Guideline" establishing the design requirements for Lot 39. Regarding prosecution of
construction, the Design Guideline included the following provision: "The restrictions listed in Article
JJI, Item 3.09 will be complied with. However, the Committee has agreed to allow Owner to build the
structures i n a p hased manner. Each of the three permanent structures (the main dwelling, the
detached garage and boathouse) will be built separately. Each phase of construction (each permanent
structure) shall be completed in a 9 month period."
The Tees had the boathouse built in 1997 and the garage built on Lot 39 in 1998. However,
on August 15, 2000, the Tees purchased the residence on Lot 38. They did not build a house on Lot
39. An attorney representing the Association sent the Tees a letter dated November 2, 2000,
requesting them to commence construction of the residence or demolition of the garage due to a
restriction violation. They were given thirty days from the date of the letter to comply. The letter
included a warning that litigation would be used to enforce the restrictions if necessary. More than
seven months later, the Association, through its attorneys, sent a second letter informing the Tees they
had the option of immediately commencing construction of a residence or immediately demolishing
the garage. The Association promised legal action within thirty days ofthe June 18,2001 letter ifthey
did not immediately pursue one of those options.
On May 29, 2002, the Association filed suit alleging the Tees were in violation of the
restrictive covenants because they failed to complete the construction of all improvements on Lot 39.
It requested a temporary injunction restraining the Tees from using the garage as a residence and a
permanent injunction requiring them to either complete the residence or remove the garage. In
response, the Tees asserted the affirmative defense of limitations and sought a declaratory judgment
that there is no time limitation for completion of construction and that neither the presence of the
garage nor their use ofthe property is in violation ofthe restrictive covenants. After a hearing, the trial
court ordered the Tees to commence construction of a residence on Lot 39 by January 2, 2004 or
remove the garage by February 27, 2004 and to pay the Association's attorney's fees.
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Notice
In their first issue, the Tees assert that the Association failed to comply with statutory
conditions precedent to filing suit. Specifically, they contend the Association did not provide them
with written notice by certified mail informing them of their right to a reasonable time to cure the
alleged violation or of their right to request a hearing.
Section 209.006 of the Texas Property Code provides that before a property owners'
association may file a suit such as this one against an owner, it must give written notice to the owner
by certified mail, return receipt requested. The notice must describe the violation and inform the
owner that he is entitled to a reasonable period to cure the violation and may request a hearing. Tex.
Prop. CODE Ann. § 209.006 (Vernon Supp. 2005). However, the notice requirements do not apply
if the association files a suit seeking a temporary restraining order or temporary injunctive relief. Id.
§ 209.007(d).
Here, the Association's petition clearly stated that it sought a temporary injunction restraining
the Tees from using the garage on Lot 39 as a residence without proper approval. However, the Tees
further argue that the Association's failure to verify its pleading and obtain a hearing on the temporary
injunction indicates that it did not really seek a temporary injunction. The Tees assert that the
Association should not be allowed to avoid the notice requirements of the Property Code by merely
including a request for a temporary injunction in the petition.
We do not agree that the Association did not seek a temporary injunction. The Association
sent two letters to the Tees expressing its discontent, requesting compliance, and warning that
noncompliance would result in litigation. The Tees received notice ofthe suit and answered, pleading
an affirmative defense and a counterclaim. The parties attempted to resolve their differences through
mediation almost three years after the Association sent the first letter. Thereafter, the parties
participated in the discovery process. In ajoint motion for continuance, the Tees assured the court they
could be ready for trial on the merits by October 6,2003. Later, the Tees attended the hearing at which
the court heard testimony on the merits.
A verified petition for injunctive relief is not required to obtain an injunction when a full
evidentiary hearing on evidence has been held. Nguyen v. Intertex, Inc., 93 S.W.3d 288, 298 (Tex.
App.-Houston [14th Dist.] 2002, no pet.). Further, the parties can agree to forego the separate hearing
on a temporary injunction or the trial court can choose to advance to the trial on the merits without a
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hearing on a temporary injunction to eliminate time-consuming duplicate hearings and appeals. Iranian
Muslim Org. v. City ofSan Antonio, 615 SW.2d 202,208-09 (Tex. 1981). Based on the circumstances
as revealed by the record, we conclude that the Tees waived their right to a hearing on temporary relief
and agreed to proceed to a hearing on the merits. They cannot now use the lack of such a hearing to
argue that the Association was not truly seeking an injunction. Because the Association sought a
temporary injunction, the notice provision of Section 209.006 is not applicable. We overrule the Tees'
first issue.
Sufficiency of the Evidence
In their second issue, the Tees contend the evidence is legally and factually insufficient to support
the judgment. They argue that the written agreement they are bound by does not require the dwelling
to be built within nine months of commencement of the garage and, in fact, dictated no deadline for
commencement of construction of the residence. The Tees contend that Mahaffey authorized
construction ofimprovements on Lot 39 in a phased manner and there was no deadline for commencing
construction ofthe residence stated in the approved Design Guideline. They argue that the language in
the Design Guideline provided a "variance" to the restrictive covenants and assert that they and
Mahaffey agreed they would be bound by the language in the Design Guideline "instead ofthe restrictive
covenant 3.09." Further, they assert that their use and construction of improvements on Lot 39 was
within the provisions of their written agreement and the restrictive covenants.
Applicable Law
We review a trial court's interpretation of a restrictive covenant de novo. Buckner v. Lakes of
Somerset Homeowners Assoc, Inc., 133 S.W.3d 294, 297 (Tex. App—Fort Worth 2004, pet. denied).
In construing a restrictive covenant, a court's primary task is to determine the intent of the framers of
the restrictive covenant. Wilmoth v. Wilcox, 734 S.W.2d 656, 658 (Tex. 1987). In determining this
intent, the court must liberally construe the covenant's language and must ensure that every provision
is given effect. Tex. Prop. Code Ann. § 202.003(a) (Vernon 1995); Munson v. Milton, 948 S.W.2d
813,816 (Tex. App.-San Antonio 1997, pet. denied). Words used in a restrictive covenant may not be
enlarged, extended, stretched, or changed by construction, but will be given their commonly accepted
meanings. Buckner, 133 S.W.3dat297.
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In addition, the trial court's findings of fact are reviewed under the same legal and factual
sufficiency standards as jury findings. Anderson v. City ofSeven Points, 806 S.W.2d 791, 794 (Tex.
1991). When no findings offact are filed, the reviewing court implies all necessary findings to support
the judgment. Pharo v. Chambers County, Texas, 922 S.W.2d 945, 948 (Tex. 1996). Where a
complete reporter's record is filed in the record, however, these implied findings are not conclusive,
and an appellant may challenge them by raising both legal and factual sufficiency of the evidence
complaints. Roberson v. Robinson, 768 S.W.2d280, 281 (Tex. 1989).
When attacking the legal sufficiency ofan adverse finding on an issue on which a party did not
have the burden of proof, that party must demonstrate there is no evidence to support the adverse
finding. Croucher v. Croucher, 660 S.W.2d 55, 58 (Tex. 1983). To evaluate the legal sufficiency of
the evidence to support a finding, we must determine whether the proffered evidence as a whole rises
to a level that would enable reasonable and fair-minded people to differ in their conclusions. St.
Joseph Hosp. v. Wolff, 94 S.W.3d 513,519 (Tex. 2002). We sustain a no evidence point only ifthere
is no more than a scintilla of evidence proving the elements of the claim. Id. at 520. In making this
determination, we must view the evidence in the light favorable to the verdict, crediting favorable
evidence ifreasonable jurors could and disregarding contrary evidence unless reasonable jurors could
not. City ofKeller v. Wilson, 168 S.W.3d 802, 807 (Tex. 2005).
If a party is attacking the factual sufficiency of an adverse finding on an issue to which the
other party had the burden of proof, the attacking party must demonstrate that there is insufficient
evidence to support the adverse finding. See Croucher, 660 S.W.2d at 58. In addressing a factual
sufficiency of the evidence challenge, this Court must consider and weigh all of the evidence and set
aside the verdict only if it is so contrary to the overwhelming weight of the evidence as to be clearly
wrong and unjust. Cain v. Bain, 709 S.W.2d 175,176 (Tex. 1986). This Court is not a fact finder and
may not pass on the credibility of the witnesses or substitute our judgment for that of the trier of fact.
Clancy v. Zale Corp., 705 S.W.2d 820, 826 (Tex. App.-Dallas 1986, writ ref d n.r.e.).
Discussion
Article 3.09 provides that, with certain exceptions not applicable here, the exterior of each
structure shall be completed within nine months from the commencement of construction of "any
dwelling unit or other structure commenced upon any lot." By the terms ofthe Design Guideline, the
Tees agreed to comply with Article 3.09 of the East Lake Woods deed restrictions. However, the
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Design Guideline also allowed the Tees "to build the structures in a phased manner" and to build each
structure separately. Finally, paragraph 9 of the Design Guideline provides: "Each phase of
construction (each permanent structure) shall be completed in a 9 month period." As the Tees point
out, the Design Guideline does not set a time limit for building the dwelling on Lot 39. They argue
that a court imposed deadline for commencing construction on a residence imposes a significant duty
on them contrary to their free use of their property. We disagree.
Where a contract does not provide a time for performance, the law will imply that performance
must occur within a reasonable time. Pearcy v. Environmental Conservancy ofAustin and Central
Texas, Inc., 814 S.W.2d 243, 246 (Tex. App.-Austin 1991, writ denied). What is a reasonable time
depends on the facts and circumstances as they existed when the contract was formed. Id. Factors
include the nature and character of the action and the difficulty of accomplishing it, as well as the
purpose of the agreement. Id. Where the material facts are undisputed, the question of what is a
reasonable time is a matter of law. Id.
The Tees wanted the "variance" because at the time, early 1997, they believed Mr. Tees was
about to go overseas for a work assignment that would last from three to five years. They bought Lot
39 in February 1997 apparently anticipating they would build a residence on the lot three to five years
later when Mr. Tees returned. The boathouse was completed in 1997, and the garage was completed
in June 1998. The overseas work assignment never materialized. The Tees purchased the house next
door in August 2000 after learning that Mr. Tees would not be working overseas. Apparently, by
August 2000, the reason for the "variance" no longer existed. Moreover, more than five years passed
between the time the Tees purchased the lot and the date the Association filed its suit. The Tees
actually had the extra time to build that they originally anticipated needing.
By the plain terms of the original deed restrictions, the residence was to be completed within
nine months of the date construction began on the garage. Because it was not, the Tees were not in
compliance with the original deed restrictions. Assuming that the Design Guideline created a
"variance" so the Tees did not have to complete construction of the residence within nine months of
beginning construction of the garage, the Design Guideline inappropriately lacked a deadline for
commencing construction on the residence. Even though, in 1997, the Tees had anticipated a three
to five year delay before needing a residence, the Tees' argument is necessarily interpreted to mean
they believe the Design Guideline allows them to build a residence on Lot 39 at any time in the future.
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Under the circumstances, such an open ended time for performance is not reasonable as a matter of
law. See Pearcy, 814 S.W.2d at 246. Thus, there is legally and factually sufficient evidence to support
the trial court's judgment. See Croucher, 660 S.W.2d at 58. We overrule the Tees' second issue.
Attorney's Fees
In their third issue, the Tees assert the trial court erred in awarding the Association its
attorney's fees. T hey argue that t he P roperty C ode r equires n otice u nder S ection 2 09.006 a s a
condition precedent to the award of attorney's fees. Further, they argue the Association provided no
evidence of how its fees were calculated or whether the fees were incurred before or after the date of
the hearing, or the date it could have been held, as required by Section 209.008(b) of the Property
Code.
As a general rule, attorney's fees are not recoverable in Texas unless allowed by contract or
by statute. Dallas Cent. Appraisal Dist. v. Seven Inv. Co., 835 S.W.2d 75, 77 (Tex. 1992). Whether
attorney's fees are available under a particular statute is a question of law, which we review de novo.
See Holland v. Wal-Mart Stores, Inc., 1 S.W.3d 91, 94 (Tex. 1999).
Section 209.008 of the Property Code provides as follows:
(a) A property owners' association may collect reimbursement of reasonable attorney's
fees and other reasonable costs incurred by the association relating to collecting
amounts, including damages, due the association for enforcing restrictions or the
bylaws or rules of the association only if the owner is provided a written notice that
attorney's fees and costs will be charged to the owner if the delinquency or violation
continues after a date certain.
(b) An owner is not liable for attorney's fees incurred by the association relating to a
matter described by the notice under Section 209.006 if the attorney's fees are
incurred before the conclusion of the hearing under 209.007 or, if the owner does not
request a hearing under that section, before the date by which the owner must request
a hearing. The owner's presence is not required to hold a hearing under Section
209.007.
Tex. Prop. Code Ann. § 209.008 (Vernon Supp. 2005).
A plain reading ofSection 209.008 reveals that it applies to collection matters. The case before
us is not a collection suit. Therefore, Section 209.008 is inapplicable. However, the Association did
provide notice in a letter dated November 2,2000. The letter was sent to the Tees by the Association's
legal counsel. It informed the Tees that if they did not commence construction on a residence or
commence demolition of the existing structure within thirty days of the date of the letter, the
Association would commence litigation. It also stated that, if successful, the Association would be
entitled to recover its attorney's fees and court costs. In a breach of restrictive covenant action, "the
court shall allow to a prevailing party who asserted the action reasonable attorney's fees." Tex. Prop.
Code Ann. § 5.006 (Vernon 2004). Therefore, the trial court did not err in awarding attorney's fees
to the Association. We overrule the Tees' third issue.
Declaratory Judgment Claim
In issues four and five, the Tees assert that the trial court erroneously denied their request for
declaratory judgment that they were in compliance with the restrictions and erroneously denied their
request for attorney's fees in the declaratory judgment action.
The Declaratory Judgments Act provides that a person interested under a deed or other writing
constituting a contract may have the court determine any question of construction or validity arising
under the instrument and obtain a declaration of rights, status, or other legal relations under it. Tex.
Civ. Prac. & Rem. Code Ann. § 37.004(a) (Vernon 1997). It also provides that the court may award
costs and attorney's fees. Id. § 37.009. If a party's defensive declaratory action asserts relief having
greater ramifications than the original suit, it can be an appropriate mechanism under which to award
attorney's fees. Anderson v. New Property Owners' Ass'n ofNewport, Inc., 122 S.W.3d 378, 391
(Tex. App.-Texarkana 2003, pet. denied). However, declaratory relief is not available to settle
disputes already pending before the court. BHPPetroleum Co. v.Millard, 800 S.W.2d 838,841 (Tex.
1990) (orig. proceeding). A declaratory judgment may not be used solely as a vehicle to obtain
attorney's fees and is inappropriate if it will serve no useful purpose. Boatman v. Lites, 970 S.W.2d
41, 43 (Tex. App.-Tyler 1998, no pet.).
In their counterclaim, the Tees sought a declaratory judgment that there is no time limitation
for completion of improvements to Lot 39, their construction of the garage is not in violation of
restrictive covenants, and, alternatively, that their use of the property is not violative of restrictive
covenants. Their request presented no issues beyond those already raised by the Association, and their
counterclaim would have no greater ramifications than the original suit. See Anderson, 122 S.W.3d
at 391. Therefore, the trial court did not err in denying the Tees' request for declaratory relief or for
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attorney's fees based on that action. We overrule the Tees' fourth and fifth issues.
Limitations
In their sixth issue, the Tees assert that the trial court erred in not finding that the Association's
suit was barred by limitations. They argue that, if they were required to complete all construction
within nine months of the start of construction, the date for completion of construction was nine
months after commencement of the boathouse. They estimate that nine month completion
date to have been sometime between the fall of 1997 and February 1998. This would make the
deadline for filing suit February 2002. Because the Association filed suit on May 29, 2002, the Tees
argue, the suit was barred by the four year statute of limitations.
Actions to enforce restrictive covenants are controlled by a four year statute oflimitations. Air
Park-Dallas Zoning Comm. v. Crow-Billingsley Airpark, Ltd., 109 S.W.3d 900, 911 (Tex.
App.-Dallas 2003, no pet.). A defendant urging the affirmative defense of the statute of limitations
must prove when the cause of action accrued. American Med. Elecs., Inc. v. Korn, 819 S.W.2d 573,
576 (Tex. App.-Dallas 1991, writ denied). An action for damages for breach of a written contract
accrues when the breach occurs or when the claimant has knowledge of facts sufficient to place him
on notice ofthe breach. Rose v. Baker &Botts, 816 SW.2d 805, 810 (Tex. App.-Houston [1st Dist.]
1991, writ denied). A breach occurs when a party to a contract fails to perform a duty required by the
contract. Hoover v. Gregory, 835 S.W.2d 668, 677 (Tex. App.-Dallas 1992, writ denied).
In their argument under this issue, the Tees have omitted any mention of the effect of the
language in the Design Guideline addressing prosecution of construction. Therefore, we will restrict
our discussion to the deed restrictions. Article 3.09 of the deed restrictions requires construction to
be completed within nine months from its commencement. The first structure the Tees built was their
boathouse. The Tees argue that the deed restriction's time frame for completion therefore refers to
construction of their boathouse. However, as the Association points out, Article 3.09 requires us to
reject this argument.
Article 3.09 states that, within nine months from the commencement of construction, "any
dwelling unit or other structure commenced upon any lot shall be completed." The record shows that
the City of Tyler owns the lake and that the Tees' boathouse is constructed over the water and not on
Lot 39. Therefore, the deed's timing requirement must be applied to commencement of construction
9
of the garage, the only structure on the lot. Mr. Tees testified that the garage was completed in June
1998. The record does not indicate when construction on the garage began. It is impossible to
determine when the nine month period ended in the absence of a start date. Therefore, the Tees did
not prove when the cause of action accrued or that the Association's suit is barred by limitations. See
Korn, 819 S.W.2d at 576. We overrule the Tees' sixth issue.
Conclusion
The Association's suit is not barred by limitations and it did not fail to comply with conditions
precedent to filing. The evidence is legally and factually sufficient to support the judgment. The trial
court properly denied the Tees' request for a declaratory judgment and properly determined the award
of attorney's fees.
However, to affirm the judgment in its entirety would require ofthe Tees an impossibility. Due
to the passage of time, the Tees cannot comply with the trial court's judgment by the dates specified
in that judgment. This court may make any appropriate order that the law and the nature of the case
require. Tex. R. App. P. 43.6. We therefore modify the judgment to delete the dates specified in the
judgment by which the Tees were to commence and complete construction of a residence or
commence and complete removal ofthe garage on Lot 39. We remand the cause to the trial court for
determination of a revised timetable for compliance and entry of an appropriate order. As modified,
we affirm the trial court's judgment.
SAM GRIFFITH
Justice
Opinion delivered Januaryl8, 2006.
Panel consisted of Worthen, C.J., Griffith, J., and DeVasto, J.
(PUBLISH)
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COURT OF APPEALS
TWELFTH COURT OF APPEALS DISTRICT OF TEXAS
JUDGMENT
JANUARY 18, 2006
NO. 12-04-00020-CV
ALISTAIR A. TEES AND NANCY TEES,
Appellants
V.
EAST LAKE WOODS HOMEOWNERS ASSOCIATION,
Appellee
Appeal from the County Court at Law
of Smith County, Texas. (Tr.Ct.No. 46,800)
THIS CAUSE came on to be heard on the oral arguments, appellate record and
the briefs filed herein; and the same being inspected, it is the opinion of this court that the judgment
of the trial court below should be modified and, as modified, affirmed.
It is therefore ORDERED, ADJUDGED and DECREED that the judgment of
the court below be modified to delete the dates by which the Tees must either commence and
complete construction of a residence on Lot 39, or commence and complete removal of the garage on
Lot 39;
It is further ORDERED, ADJUDGED and DECREED that the cause is
remanded to the trial court for determination of a revised timetable for compliance and entry of an
appropriate order; and as modified, the judgment of the trial court is affirmed.
It is further ORDERED that Appellants, ALISTAIR A. TEES AND NANCY
TEES, pay all costs in this cause expended, both in this court and the court below for which let
execution issue; and that this decision be certified to the trial court below for observance.
Sam Griffith, Justice.
Panel consisted of Worthen, C.J., Griffith, J., and DeVasto, J.