Jon Eric Jacks, Individually and D/B/A Jon Eric Jacks Development v. G.A. Bobo, Jr. ( 2009 )

NO. 12-07-00420-CV
IN THE COURT OF APPEALS
TWELFTH COURT OF APPEALS DISTRICT
TYLER, TEXAS
JON ERIC JACKS, INDIVIDUALLY AND § APPEAL FROM THE
D/B/A JON ERIC JACKS DEVELOPMENT,
APPELLANT
V. § COUNTY COURT AT LAW #2
G. A. BOBO, JR.,
APPELLEE § GREGG COUNTY, TEXAS
MEMORANDUM OPINION
Jon Eric Jacks, individually and doing business as Jon Eric Jacks Development, appeals from
the trial court’s judgment in favor of G.A. Bobo, Jr. awarding injunctive relief, damages, and
attorney’s fees. Jacks raises four issues on appeal. We reverse the award of damages and attorney’s
fees. In all other respects, we affirm the trial court’s judgment.
BACKGROUND
Jacks purchased lots 5, 6, and 7 in Block 5 of the Green Acres Subdivision in Longview,
Gregg County, Texas. Jacks envisioned a garden home gated development with eight houses on the
three lots facing a private street and cul-de-sac in its center. Jacks prepared a replat of the three lots
reflecting his intentions and submitted it to the City of Longview. In early February, Jacks poured
foundation slabs on lots 5 and 7 for the first two houses of the contemplated eight house
development.
Bobo owned, and for over fifty years had lived on, lot 10, block 6 of the subdivision across
Oxford Lane from Jacks’s three lots. On March 2, 2007, Bobo filed suit for a temporary restraining
order, a temporary injunction, and, on final hearing, a permanent injunction to compel Jacks’s
compliance with the restrictive covenants for the subdivision requiring homes on lots in the
subdivision (1) to front the street upon which each lot faces and (2) to be set back thirty-five feet
from the front property line. Bobo also requested damages under Texas Property Code
subsection 202.004(c) for each day’s violation of the restrictive covenants. Jacks filed a general
denial on March 19, 2007. On March 22, 2007, the trial court granted a temporary injunction
restraining Jacks from constructing or continuing any work on improvements on the lots that did not
face Oxford Lane and that did not comply with the thirty-five foot setback provision in the
restrictions.
Since Jacks had poured the slabs so that the homes would face the planned street rather than
Oxford Lane, the slabs were between ten and fifteen feet closer to Oxford Lane than the thirty-five
feet required by the restrictions. Although not required by the court’s temporary injunction, on
April 7, Jacks sawed off, altered, and reoriented the slabs so that they were at least thirty-five feet
from and facing Oxford Lane. Jacks later testified at the hearing on the permanent injunction that
his alteration and reorientation of the foundation slabs were dictated by the time limitations imposed
by a like kind or deferred exchange that was the source of the money he used to purchase the lots and
build the houses.
On July 27, 2007, approximately a week before trial, Jacks filed his amended original answer
alleging the enforcement of the deed restrictions was barred by the doctrine of waiver.
It was undisputed at trial that Jacks was then in compliance with the deed restrictions that
Bobo sought to enforce. Nevertheless, much of the testimony and other evidence that Jacks elicited
or introduced during the trial was devoted to an attempt to show the architectural restrictions were
rendered invalid, and therefore unenforceable, because of their frequent violation by Bobo and
others.
At the close of the bench trial, the trial court granted the permanent injunction, and awarded
Bobo $8,200 in damages as well as attorney’s fees. In his findings of fact, the trial judge found, inter
alia, (1) that there had been no waiver of the architectural restrictions alleged to have been violated,
(2) that Jacks had been in open and unexcused violation of the restrictions for forty-one days prior
to the alteration and reorientation of the slabs, (3) that Bobo would suffer irreparable harm and
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would have no adequate remedy at law unless a permanent injunction was entered enforcing the
restrictions, and (4) that under Texas Property Code subsection 202.004(c), Bobo was entitled to
recover damages from Jacks of $200 per day for forty-one days, or a total of $8,200.
MOOTNESS
In his first issue, Jacks contends the trial court’s entry of a permanent injunction was void
as an impermissible advisory opinion, because Bobo’s claim for injunctive relief was moot at trial.
Applicable Law
This court has previously summarized the mootness doctrine as follows:
The requirement that an action present a “live controversy” is an essential component of subject matter
jurisdiction. State Bar of Texas v. Gom ez, 891 S.W .2d 243, 244 (Tex. 1994). If at any stage of the
proceeding there ceases to be an actual controversy between the parties, a case becomes moot. Nat’l
Collegiate Athletic Ass’n v. Jones, 1 S.W .3d 83, 86 (Tex. 1999). Once a case or claim is determined
to be moot, a court lacks subject matter jurisdiction to decide the issues. Euless v. Dallas/Ft. Worth
Airport Bd., 936 S.W.2d 699, 703 (Tex. App.–Dallas 1996, writ denied).
Black v. Jackson, 82 S.W.3d 44, 51-52 (Tex. App.–Tyler 2002, no pet.). Absent a live controversy,
any decision would be but an advisory opinion, and, under our constitution, courts have no
jurisdiction to render advisory opinions. Speer v. Presbyterian Children’s Home and Serv. Agency,
847 S.W.2d 227, 229 (Tex. 1993). The trial court must determine “that there exists some cognizable
danger of recurrent violation, something more than the mere possibility which serves to keep the case
alive.” United States v. W. T. Grant Co., 345 U.S. 629, 633, 73 S. Ct. 894, 898, 92 L. Ed. 2d 1303
(1953). If “the issues presented are no longer ‘live’ or the parties lack a legally cognizable interest
in the outcome[,]” the case is moot. Williams v. Lara, 52 S.W.3d 171, 184 (Tex. 2001) (citing
Murphy v. Hunt, 455 U.S. 478, 481, 102 S. Ct. 1181, 71 L. Ed. 2d 353 (1982)).
However, the voluntary discontinuance of the allegedly illegal conduct does not, in itself,
make the case moot and thereby deprive the trial court of the power to hear and determine the case
and grant injunctive relief. W. T. Grant Co., 345 U.S. at 632-33, 73 S. Ct. at 897. An unsettled
controversy may survive the cessation of the challenged activity, such as a dispute over the legality
of the challenged practices. Id., 345 U.S. at 632, 73 S. Ct. at 897. The dispute may remain alive even
when the cessation of the challenged conduct is accompanied by protestations of repentance and an
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expressed intent to comply. Id.
Nevertheless, a case may be moot “if the defendant can demonstrate that ‘there is no
reasonable expectation that the wrong will be repeated.’” Id.; see also Lubbock Prof’l Firefighters
v. City of Lubbock, 742 S.W.2d 413, 419 (Tex. App.–Amarillo 1987, writ ref’d n.r.e.). “The burden
is a heavy one.” W.T. Grant Co., 345 U.S. at 632, 73 S. Ct. at 897.
Discussion
Jacks argues on appeal that there ceased to be an actual case or controversy when he modified
the slabs on lots 5 and 7 so that they were set back thirty-five feet from the front property line and
faced Oxford Lane, thereby complying with the two restrictions Bobo sought to enforce by
injunction. He insists that since there was no violation to enjoin at the time of trial, the controversy
was moot and the trial court lacked jurisdiction to grant Bobo’s claim for injunctive relief.
Jacks’s modification of the foundation slabs to comply with the restrictions was compelled
by the time constraints imposed by the like kind exchange arrangement that was the source of his
financing for the project. Jacks testified that if he had not made the changes to comply with the
restrictions, he could not have finished the houses in time to avoid losing a tax advantage amounting
to thousands of dollars. The action taken was not an abandonment of his challenge to the restrictive
covenants or an expression of his intent to abide by them in the future. Four months after making
the changes, Jacks continued to urge the invalidity of the restrictions throughout the trial. There is
nothing in the record from which we can infer his intent to voluntarily abide by them.
Jacks still owns property in the subdivision that, but for the restrictive covenants, would be
susceptible to future development. In concluding his final argument at trial, Jacks’s attorney asked
the court to deny the permanent injunction and “allow Mr. Jacks to continue to build the remaining
houses in a manner that he sees is - - is most beneficial and most profitable.” As late as the hearing
on the motion for new trial, Jacks continued to attack the enforceability of the restrictions and
professed an intent to further subdivide the property. In the absence of effective restraint, Jacks
would be free to ignore the restrictions.
Despite Jacks’s modification of the slabs on lots 5 and 7 to conform to the restrictions, there
remained the underlying dispute between the parties over their validity and enforceability. There
continued to exist an “actual controversy, and adverse interest . . . with a subject-matter on which
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the judgment of the court can operate[.]” Walling v. Helmerich & Payne, 323 U.S. 37, 43, 65 S.
Ct. 11, 15, 89 L. Ed. 29 (1944). The issue was not moot. The trial court had jurisdiction to enter the
permanent injunction. Jacks’s first issue is overruled.
LEGAL AND FACTUAL INSUFFICIENCY
In his second and third issues, Jacks maintains the evidence is both legally and factually
insufficient to support injunctive relief.
Applicable Law
In reviewing the legal sufficiency of the evidence, “appellate courts must view the evidence
in the light favorable to the verdict, crediting favorable evidence if reasonable jurors could, and
disregarding contrary evidence if reasonable jurors could not.” City of Keller v. Wilson, 168 S.W.3d
802, 807 (Tex. 2005). The fact finder is the sole judge of the credibility of the witnesses and the
weight to be given their testimony. Id. at 819. The reviewing court must assume that the fact finder
credited testimony favorable to the verdict and did not believe testimony to the contrary. Id. The
reviewing court must assume that the fact finder resolved all conflicts in the evidence and all
conflicting inferences reasonably drawn from the evidence in accordance with the verdict. Id. at 821.
In reviewing a challenge to the factual sufficiency of the evidence supporting a finding that
favors a party that had the burden of proof, the appellate court may set aside the finding only if a
neutral review of all the evidence demonstrates that the finding is clearly wrong and manifestly
unjust. See Garza v. Alviar, 395 S.W.2d 821, 823 (Tex. 1965). Reversal may occur because the
evidence was based on weak or insufficient evidence or because the proponent’s proof, although
adequate if taken alone, is overwhelmed by contrary proof. Santa Fe Petroleum, L.L.C. v. Star
Canyon Corp., 156 S.W.3d 630, 637 (Tex. App.–Tyler 2004, no pet.).
Rule 693 of the Texas Rules of Civil Procedure provides that “[t]he principles, practice and
procedure governing courts of equity shall govern proceedings in injunctions when the same are not
in conflict with these rules or the provisions of the statutes.” TEX . R. CIV . P. 693. Therefore, it is
important to bear in mind that the decision of whether to grant an injunction based upon the ultimate
issues of fact found by the jury is for the trial court, exercising chancery powers, and not the jury.
State v. Pet Foods, Inc., 591 S.W.2d 800, 803 (Tex. 1979). The Texas Supreme Court has observed
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that it is the trial court who decides the expediency, necessity, or propriety of equitable relief
including the determination of the probability of the resumption or continuance of the challenged
conduct. Id. The court explained as follows:
W e do not consider the question of likelihood of [defendant’s] resumption or continuation of the acts
enjoined as being an ultimate issue of fact for the jury. . . . A jury in equity, even under a blended
system, does not decide the issue of expediency, necessity or propriety of equitable relief. . . . It was
an element deducible from the circumstances for the court to consider in determining whether wrong
or injury might be anticipated and whether chancery powers should be exercised. It constituted here,
in effect, a mixed question of law and fact at most. Such questions are not for the jury in injunction
cases.
Id. (quoting Alamo Title Co. v. San Antonio Bar Ass’n, 360 S.W.2d 814, 816 (Tex. Civ.
App.–Waco 1962, writ ref’d n.r.e.)).
In an appeal from a permanent injunction, the standard of review is based upon a clear abuse
of discretion. Jim Rutherford Invs., Inc. v. Terramar Beach Cmty. Ass’n, 25 S.W.3d 845, 848
(Tex. App.–Houston [14th Dist.] 2000, pet. denied). “The chancellor’s decision is based on all the
circumstances; his discretion is necessarily broad and a strong showing of abuse must be made to
reverse it.” W. T. Grant Co., 345 U.S. at 633, 73 S. Ct. at 898.
Discussion
In Alamo Title, the trial court permanently enjoined the title company from preparing legal
instruments in real estate transactions. Alamo Title, 360 S.W.2d at 814. Alamo Title urged almost
identical arguments to those advanced by Jacks in the instant case. Alamo Title contended that the
trial court erred in not dismissing the case as moot, because there was no evidence that there was a
reasonable probability or threat that the acts enjoined would recur in the future. The title company
insisted that the uncontradicted evidence established the contrary. Id. at 814-15.
Under the threat of impending litigation, the title company ceased to prepare legal
instruments and declared its resolve to abandon the practice. The court of appeals held that this did
not preclude the permanent injunction despite the title company’s reiterated renunciation of the
practice during the trial and its expressed intent to refrain from the conduct. Id. at 817.
Jacks is an experienced real estate developer. He reviewed the restrictive covenants,
including the two restrictions at issue, before he bought the property. Jacks devised a plan of
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development calling for multiple houses on the three lots that he knew conflicted with the
restrictions as written. He never sought a release of the subject lots from the restrictions before
commencing development despite his knowledge of the specified procedure. At trial, the following
exchange occurred when Jacks was asked if he still had plans for further development of the lots:
Q. And do you have plans for additional homes on lots 5, 6 and 7 as we sit here today?
A. Does it matter?
Q. W ell, sir, I guess that’s up to the Court whether it matters or not.
A. W e have no plans in writing. No plats other than probably an acre and a half of
vacant land.
Jacks still owns undeveloped property on the three lots in question. As late as the hearing on the
motion for new trial, he indicated that he contemplated further development of the lots. Jacks’s
modification of the foundations was not an admission of the validity of the restrictions and did not
represent a disavowal of his past position. Throughout the lower court proceedings, Jacks insisted
the restrictions were unenforceable, asking the court in his concluding argument to allow him to
build the remaining houses in the way that he sees is most beneficial and most practical.
The evidence was both legally and factually sufficient to support the trial judge’s
determination that a permanent injunction was required to restrain Jacks from future violations. The
trial court did not abuse its discretion in granting the permanent injunction. Jacks’s second and third
issues are overruled.
INDIVIDUAL RECOVERY OF DAMAGES UNDER SUBSECTION 202.004(C )
In his fourth issue, Jacks maintains that Bobo does not have standing to collect damages
under Texas Property Code subsection 202.004(c). In its findings of fact, the trial court found that
“[P]laintiff is entitled to recover statutory damages from Defendant in the amount of $8,200 for 41
days at $200.00 per day in accordance with TEX . PROP . CODE § 202.004(c).” In its conclusions of
law, the court concluded “[a] court may assess civil damages for the violation of a restrictive
covenant in an amount not to exceed $200 for each day of the violation. (TEX . PROP . CODE ANN .
§ 202.004(c).” The trial court awarded the maximum damages allowable under this subsection.
Bobo proved no actual damages.
Jacks raises Bobo’s standing for the first time on appeal. Bobo insists that Jacks’s failure to
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raise the issue in the trial court by a timely request, objection, or motion waived his right to complain
on appeal. See TEX . R. APP . P. 33.1. Bobo also argues that nothing in subsection 202.004(c)
precludes the award of discretionary civil damages to individual property owners within the
subdivision.
Applicable Law
Whether a particular remedy is available under a statute is a question of law for the court.
See Johnson v. City of Ft. Worth, 774 S.W.2d 653, 656 (Tex. 1989). A trial court’s conclusions
of law are reviewed de novo as legal questions with no deference to the trial court’s conclusion.
State v. Heal, 917 S.W.2d 6, 9 (Tex. 1996). Individual provisions of a statute are to be read in
context with the entire statute to determine the legislature’s intent. Bridgestone/Firestone, Inc. v.
Glyn-Jones, 878 S.W.2d 132, 133 (Tex. 1994). A provision in a statute must not be given a
meaning inconsistent with the statute’s other provisions. Barr v. Bernhard, 562 S.W.2d 844, 849
(Tex. 1978).
Standing is a component of subject matter jurisdiction. Tex. Ass’n of Bus. v. Tex. Air
Control Bd., 852 S.W.2d 440, 445 (Tex. 1993). “Subject matter jurisdiction is an issue that may be
raised for the first time on appeal; it may not be waived by the parties. . . .” Id. at 445-46.
Texas Property Code subsection 202.004 provides as follows:
(a) An exercise of discretionary authority by a property owners’ association or other
representative designated by an owner of real property concerning a restrictive
covenant is presumed reasonable unless the court determines by a preponderance
of the evidence that the exercise of discretionary authority was arbitrary, capricious,
or discriminatory.
(b) A property owners’ association or other representative designated by an owner of
real property may initiate, defend, or intervene in litigation or an administrative
proceeding affecting the enforcement of a restrictive covenant or the protection,
preservation, or operation of the property covered by the dedicatory instrument.
(c) A court may assess civil damages for the violation of a restrictive covenant in an
amount not to exceed $200 for each day of the violation.
TEX . PROP . CODE ANN . § 202.004 (Vernon 2007). A property owners’ association is “an
incorporated or unincorporated association owned by or whose members consist primarily of the
owners of the property covered by the dedicatory instrument and through which the owners . . .
manage or regulate the residential subdivision. . . .” Id. § 202.001(2).
Both courts that have addressed the question have held that an individual owner bringing suit
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on his own behalf and not as a representative designated by the other owners may not recover civil
damages under subsection 202.004(c). See Hawkins v. Walker, 233 S.W.3d 380, 389-90 (Tex.
App.–Fort Worth 2007, no pet.); Quinn v. Harris, No. 03-98-00117-CV, 1999 WL 125470, at *7-8
(Tex. App.–Austin Mar. 11, 1999, pet. denied) (not designated for publication).
Discussion
The threshold inquiry in ascertaining Bobo’s right to recovery is the determination of Bobo’s
standing, as a private lot owner, to pursue the remedy created by the statute. Without standing, Bobo
could not seek recovery under the statute, and the trial court would have no authority to award
damages. “[S]tanding is a component of subject matter jurisdiction; it cannot be waived and may
be raised for the first time on appeal.” Tex. Air Control Bd., 852 S.W.2d at 445. Therefore, we
shall address Jacks’s complaint.
In construing the statute, its individual provisions must be read in the context of the entire
statute in order to determine the legislature’s intent. Barr, 562 S.W.2d at 849. “[O]ne provision will
not be given a meaning out of harmony or inconsistent with other provisions, although it might be
susceptible of such a construction if standing alone.” Id. Subsection 202.004(a) provides that a
presumption of reasonableness should be applied to “[a]n exercise of discretionary authority by a
property owners’ association or other representative designated by an owner of real property . . .
unless the court determines by a preponderance of the evidence that the exercise of discretionary
authority was arbitrary, capricious, or discriminatory.” TEX . PROP . CODE ANN . § 202.004(a) (Vernon
2007) (emphasis added). Subsection 202.004(b) states that “[a] property owners’ association or
other representative designated by an owner of real property may initiate, defend, or intervene in
litigation . . . affecting the enforcement of a restrictive covenant. . . .” TEX . PROP . CODE ANN .
§ 202.004(b) (emphasis added).
Although individual property owners are not expressly excluded, subsection 202.004(b)
specifically provides that a “property owners’ association or other representative designated by an
owner of real property” may sue to enforce a restrictive covenant; individual property owners are
nowhere identified in the statute as persons or entities authorized to “initiate, defend or intervene in
litigation . . . affecting the enforcement of a restrictive covenant. . . .” These two subsections plainly
contemplate enforcement actions by property owners’ associations or owners’ representatives. When
subsection 202.004(c) is considered in the context of the statute’s other provisions, it is evident that
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the legislature intended the civil damages provided in the subsection to be available only to the
entities expressly named in the statute and to no others. Any other construction would be
inconsistent with the other provisions of the statute. See Hawkins, 233 S.W.3d at 389-90.
The trial court erred in concluding that an individual property owner may bring suit to
recover civil damages under subsection 202.004(c). Bobo is neither a property owners’ association
nor a designated representative of the subdivision’s property owners. He brought suit in his
individual capacity, and he is therefore not entitled to recover civil damages under the subsection.
Jacks’s fourth issue is sustained.
ATTORNEY ’S FEES
In its judgment, the trial court awarded Bobo $6,000 for attorney’s fees through trial and the
entry of judgment and $8,000 in the event of an unsuccessful appeal to the court of appeals. We
have overruled Jacks’s first, second, and third issues, by which he challenges the trial court’s grant
of a permanent injunction. However, we have sustained his fourth issue relating to the trial court’s
award of $8,200 in civil damages to Bobo. We conclude that, in the light of our disposition of the
case, the trial court should reconsider the question of appropriate attorney’s fees. See Neeley v. West
Orange-Cove Consol. Indep. Sch. Dist., 176 S.W.3d 746, 799 (Tex. 2005).
DISPOSITION
We affirm the trial court’s judgment granting a permanent injunction. We reverse the trial
court’s judgment for Bobo on his claim for civil damages under subsection 202.004 of the Property
Code and render judgment that Bobo take nothing on that claim. We reverse the trial court’s award
of attorney’s fees to Bobo and remand to the trial court for further proceedings.
BILL BASS
Justice
Opinion delivered July 31, 2009.
Panel consisted of Worthen, C.J., Griffith, J., and Bass, Retired Justice, Twelfth Court of Appeals, Tyler, sitting by
assignment.
(PUBLISH)
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