Russell Evans and Terrie Evans v. Casey Davis and Happy Hide-A-Way Civic Club, Inc. ( 2013 )

Affirmed in Part, Reversed in Part, Remanded, and Memorandum Opinion
filed November 19, 2013.
In The
Fourteenth Court of Appeals
NO. 14-12-01053-CV
RUSSELL EVANS AND TERRIE EVANS, Appellants
V.
CASEY DAVIS AND HAPPY HIDE-A-WAY CIVIC CLUB, INC., Appellees
On Appeal from the 151st District Court
Harris County, Texas
Trial Court Cause No. 2011-38387
MEMORANDUM OPINION
When appellants Russell and Terrie Evans allegedly failed to comply with
deed restrictions, the property owner‘s association for their subdivision, appellee
Happy Hide-A-Way Civic Club, Inc. (the Club), demolished their house and two
outbuildings on their property. The trial court held that the Club was authorized to
destroy the structures and granted summary judgment against the Evanses‘ claim to
recover their value. It also granted summary judgment awarding the Club statutory
fines and damages for the cost of the demolition—a total of $83,800.
The Evanses raise three issues on appeal, but we focus on two of them.1 In
their first issue, the Evanses contend that the trial court erred by granting summary
judgment based upon the Club‘s alleged authorization to destroy the structures
because the Club failed to establish as a matter of law that it had such authority.
Because we agree that the deed restrictions, bylaws, and statutes upon which the
Club relies did not authorize demolition of the structures, we sustain the Evanses‘
first issue.
In their third issue, the Evanses argue that the trial court should not have
granted summary judgment awarding the Club damages. We agree because the
summary judgment evidence does not conclusively establish that the Club notified
the Evanses of its intent to sue for fees and costs as required by statute. Because
we sustain these two issues, we reverse in part and remand for further proceedings.
BACKGROUND
As far as the record reveals, the problems began in April 2010, when the
Club first cited the Evanses for various violations of deed restrictions. The Club
sent the Evanses a letter alleging that their property was ―being used or maintained
as dumping ground,‖ that various vehicles—some broken down—were
―improperly stored‖ on it, and that the weeds and grass were not ―maintained in a
1
In their second issue, the Evanses argue that the trial court erred by dismissing appellee
Casey Davis. The trial court dismissed Davis after sustaining various special exceptions and
ordering the Evanses to ―more specifically describe and clarify the aspects of their pleadings.‖
Although the Evanses filed another petition, the trial court concluded that they ―refused to amend
and cure their defective pleading‖ and dismissed Davis as a result. On appeal, the Evanses do
not address the basis for Davis‘s dismissal and do not argue that their amended pleading
corrected the flaws that led the trial court to dismiss Davis. They simply contend, without
citation to authority, that Davis should not have been dismissed. Because the Evanses‘ appellate
brief fails to attack the grounds for Davis‘s dismissal, we overrule the Evanses‘ second issue.
See Tex. R. App. P. 38.1(i). The trial court‘s order dismissing the Evanses‘ claims against Davis
with prejudice is affirmed.
2
sanitary, healthful and attractive manner.‖ In an affidavit, Terrie Evans testified
that ―[a]s soon as [the Evanses] got the [letter], [they] started cleaning up the debris
and hauled off the vehicles.‖2 She averred that ―[a]fter [the Evanses] had cleaned
up the property,‖ she contacted the Club and an official told her that ―the premises
looked good and . . . [the Club] was satisfied.‖3
An affidavit from one of the Club‘s officials tells a different story. The
official testified that conditions at the property violated deed restrictions ―at all
times relevant to this lawsuit.‖4 In any event, neither party disputes that after the
Evanses either cured these initial violations (according to them) or did not do so
(according to the Club), the Evanses moved off of the property in September 2010.
The Evanses then ―sold the house on a contract‖ or ―leased [it] with option
to purchase‖ to someone named Vicki. The record does not reflect the exact
arrangement between the Evanses and Vicki, but there is no evidence that Vicki
ever took title to the property. There is evidence, however, that Vicki ―wanted to
remodel the house and . . . tor[e] out much of the interior.‖ As a result, according
to Russell Evans, ―a lot of the boards and materials‖ in the house were gone and
―[t]he premises w[ere] trashy.‖
It is unclear when Vicki started to remodel, but undisputed that she never
finished. At some point, Vicki ―quit paying[,] and [the Evanses] never heard from
her again.‖ The Evanses also never moved back to the subdivision. Eventually,
2
Terrie Evans testified that removal of the vehicles in April 2010 took ―a week or so.‖
On appeal, the Club argues that Evans‘s affidavit ―was made in bad faith‖ because a picture
taken ―over one year later‖ depicts a ―broken down, abandoned vehicle . . . on the premises.‖
But the presence of a vehicle in May 2011 does not conclusively establish that the Evanses failed
to remove broken down vehicles that were on the property in April 2010.
3
The Club contends that Terrie Evans‘s affidavit was inadmissible. Because our analysis
does not rely upon the affidavit, we need not address its admissibility.
4
The Evanses have never objected to any of the Club‘s summary judgment evidence.
3
according to one subdivision resident, ―the structures [on Evanses‘ property were]
stripped of all wiring, breakers, plumbing and well pump equipment.‖ The
resident attributed some of the missing components to ―thefts . . . after the
Evans[es] had abandon[ed] the property.‖ An official of the Club accused the
Evanses of ―allow[ing] the house to deteriorate to such an unsanitary and unsafe
condition that it was unlivable.‖
The Evanses allege that, as their house deteriorated, they ―were not aware
there was a problem.‖ According to Terrie Evans, the couple only became aware
of the ―problem‖ around March 2011, when they received a notice to abate from a
Harris County public health official. Along with this abatement notice, the official
―gave [the Evanses] a letter from [the Club] dated March 18, 2011.‖ The letter
stated that the property was ―being used or maintained as a dumping ground for
rubbish, trash, garbage or other wastes‖ and that it was not ―maintained in a
sanitary, healthful and attractive manner.‖ According to a board member for the
Club, Terrie Evans contacted the Club to discuss the new violations on March 22,
2011.
Terrie Evans testified that ―immediately‖ after receiving the Club‘s letter,
she and Russell ―began a clean-up campaign,‖ which consisted of ordering a
dumpster and loading it with debris. After the March notice, the Club and the
Evanses remained in regular contact regarding the clean up. On May 20, 2011, the
Club allegedly sent the Evanses a letter stating that structures on the property
would be demolished the week of June 6 and the Evanses would be billed for the
cost for the demolition. Neither this letter nor the two previously sent to the
Evanses mentioned the $200-per-day statutory fine that the Club would later sue
the Evanses to collect. Nor did any of the letters notify the couple of its right to a
hearing before the board for the Club. In any event, the Evanses contend that the
4
May letter was sent to the wrong address, so they never received it.
Around June 16, 2011, the Club had the house and two outbuildings
demolished. The Evanses sued the Club, primarily seeking ―damages for the loss
of their home.‖ The Club counter-sued for, among other things, the costs of
demolition and clean up and a $200 statutory fine for each day that the Evanses
were in violation of the deed restrictions. The Club argued that the period of
violation began thirty days after it sent the first notice in April 2010 and continued
until the day it demolished the structures in June 2011. At $200 a day, the total
fine was $80,600. The demolition and clean up cost $3,200.
The Club moved for traditional summary judgment, arguing that it had
authority to demolish the structures and was entitled to relief on its affirmative
claims as a matter of law. The Club also sought attorneys‘ fees and discovery
sanctions. The Evanses responded with a cross-motion for partial summary
judgment addressing the Club‘s affirmative claims for costs and fines. The trial
court granted the Club‘s motion in part, signing a final summary judgment that
dismissed the Evanses‘ claims with prejudice and awarded the Club the damages it
sought but not fees or sanctions.
The Evanses appealed. They argue that the trial court erred in granting
summary judgment in the Club‘s favor, but they do not challenge the denial of
their partial cross-motion for summary judgment.
ANALYSIS
The central issues presented for our review are (1) whether the Club
established its authority to demolish the structures on the Evanses‘ property as a
matter of law and (2) whether the trial court erred by granting the Club summary
5
judgment on its claims for statutory fines and damages.5 We address each issue in
turn.
I. Standard of review
We review a trial court‘s order granting traditional summary judgment de
novo. Olmstead v. Napoli, 383 S.W.3d 650, 652 (Tex. App.—Houston [14th Dist.]
2012, no pet.). To be entitled to summary judgment, the movant must demonstrate
that no genuine issues of material fact exist and that he is entitled to judgment as a
matter of law. Tex. R. Civ. P. 166a(c). If the movant does so, the burden shifts to
the non-movant to produce evidence sufficient to raise a fact issue. Olmstead, 383
S.W.3d at 652. When reviewing a summary judgment motion, we cannot read
between the lines or infer from the pleadings or evidence any grounds for summary
judgment other than those expressly set forth before the trial court. Id. When, as
here, the trial court‘s order granting summary judgment does not specify the
grounds relied on for the ruling, the summary judgment will be affirmed if any of
the theories advanced are meritorious. Id.
II. The summary judgment evidence does not conclusively establish that
the Club had authority to demolish the structures.
The Club contends that its bylaws, deed restrictions, and certain statutes
authorized it to demolish the structures.6 To construe corporate bylaws, we apply
5
The Evanses do not argue that the Club exercised its discretionary authority in an
arbitrary or capricious manner, see Tex. Prop. Code Ann. § 202.004(a) (West 2007), but only
that the Club failed to establish as a matter of law that it was authorized to destroy the structures.
We limit our analysis accordingly.
6
The Club also points out that the Evanses violated Chapter 343 of the Texas Health and
Safety Code. That chapter allows a county to abate certain nuisances after following certain
procedures. See Tex. Health & Safety Code Ann. § 343.021 (West 2010) (―the county may abate
a nuisance under this chapter‖ (emphasis added)). But the Club has not cited, nor have we
found, any provision authorizing non-governmental actors to abate violations summarily. Thus,
to the extent the Club contends Chapter 343 authorized its demolition of the structures, we
disagree.
6
the same rules that govern the interpretation of contracts. In re Aguilar, 344
S.W.3d 41, 49 (Tex. App.—El Paso 2011, no pet.) (citing cases). We do the same
when interpreting instruments recorded in the real property records, like the deed
restrictions upon which the Club relies. Marzo Club, LLC v. Columbia Lakes
Homeowners Ass’n, 325 S.W.3d 791, 798 (Tex. App.—Houston [14th Dist.] 2010,
no pet.); see also Pilarcik v. Emmons, 966 S.W.2d 474, 478 (Tex. 1998)
(―[R]estrictive covenants are subject to the general rules of contract
construction.‖).
Thus, when construing the deed restrictions and bylaws at issue here, our
primary objective is to ascertain and give effect to the intentions of the parties as
expressed in the instruments. Marzo Club, LLC, 325 S.W.3d at 798. If the
instruments are worded so that they can be given a certain or definite legal
meaning or interpretation, they are unambiguous, and we construe them as a matter
of law. Id. Whether an instrument is ambiguous is likewise a question of law for
the court. Id. Ambiguity exists when the instrument‘s meaning is uncertain and
doubtful or is reasonably susceptible to more than one interpretation. Id. If an
instrument is ambiguous, its construction is a question of fact that may not be
resolved on summary judgment. Criswell v. European Crossroads Shopping Ctr.,
Ltd., 792 S.W.2d 945, 950 (Tex. 1990).
We construe statutory language to ascertain and effectuate legislative intent.
Dunham Eng’g, Inc. v. Sherwin-Williams Co., 404 S.W.3d 785, 789 (Tex. App.—
Houston [14th Dist.] 2013, no pet.). We look to the statute‘s plain meaning
because we presume that the Legislature intends the plain meaning of its words.
Id. We view statutory terms in context, giving them full effect. Id. We presume
that every word of a statute was used for a purpose, and every omitted word was
purposefully not chosen. Id. Finally, in determining the plain meaning of a
7
statute, we read the words in context and construe the language according to the
rules of grammar and common usage. Id.
In this case, even if we assume that the Evanses violated certain deed
restrictions, none of the provisions upon which the Club relies permitted it to
demolish the structures without incurring liability to the Evanses.
A. The Club’s bylaws did not authorize it to demolish the structures
without incurring liability.
The Club first argues that it is not liable for destroying the structures because
the action fell within the corporate purposes for which the Club was organized, as
stated in the Club‘s bylaws.7 The Club cites a portion of its bylaws stating that it is
organized ―exclusively for charitable, educational, and community improvement
purposes‖ and that
[o]ther purposes of the corporation are:
To enforce the deed restrictions pertaining to Happy Hide-A-
Way Subdivision . . . [; and]
To encourage all efforts and activities in connection with
improving the community and maintaining the property values
of Happy Hide-A-Way Subdivision by better upkeep and
beautification of properties[.]
But the fact that the Club was organized to execute certain general purposes
does not immunize the Club if it commits a tort in the process. As a result, even
assuming the Club‘s board complied with its bylaws when demolishing the
Evanses‘ property, this fact alone would not protect the Club from liability.
7
Generally, bylaws are ―‗the rules and regulations or private laws enacted by the
corporation to regulate, govern and control its own actions, affairs and concerns and its
shareholders or members and its directors and officers with relation to each other and among
themselves in their relation to the corporation.‘‖ GM Oil Props., Inc. v. Wade, No. 01-08-00757-
CV, 2012 WL 246041, at *8 n.10 (Tex. App.—Houston [1st Dist.] Jan. 26, 2012, no pet.) (mem.
op.) (quoting 8 WILLIAM MEADE FLETCHER, FLETCHER CYCLOPEDIA OF THE LAW OF PRIVATE
CORPORATIONS § 4166).
8
Nothing in the bylaws suggests otherwise. Indeed, unlike one of the deed
restrictions cited by the Club and discussed below, the bylaws contain no language
authorizing the Club to effectuate these purposes ―without liability.‖ As a result,
the trial court erred to the extent it concluded these bylaws entitled the Club to
summary judgment.
B. The deed restrictions upon which the Club relies did not authorize
it to demolish the structures.
As an initial matter, the Club contends that the Evanses violated multiple
deed restrictions, but it cites only one provision in the restrictions that contains
language authorizing unilateral abatement of these violations. This provision
appears in paragraph fourteen and provides as follows:
No tract shall be used or maintained as a dumping ground for rubbish,
trash, garbage or other wastes. Garbage and waste shall not be kept
except temporarily in sanitary containers. All incinerators or other
equipment for the storage or disposal of such materials shall be kept in
a clean and sanitary condition.
The owners of all tracts shall, at all times, keep all weeds and
grass thereon cut in a sanitary, healthful and attractive manner and
shall in no event use any tract for storage of material and equipment
except for normal residential requirements. In the event of default on
the part of the owner or occupant of any tract in observing the above
requirements or any of them, Grantor may without liability to the
owner or occupant for trespassing or otherwise, enter upon said tract
and cut or cause to be cut, such weeds and grass and remove or cause
to be removed, such garbage, trash, rubbish and so on, so as to place
said tract in a neat, attractive, healthful and sanitary condition and
the occupant or owner of such tract, shall owe for the cost of such
work. The owner or occupant, as the case may be, agrees by the
purchase or occupation of any tract to pay such costs immediately
upon notice.
(Emphasis added.)
This paragraph‘s plain language allows the Club to respond to homeowner
9
defaults in two specific ways. ―[W]ithout liability to the owner,‖ the Club can (1)
―cut or cause to be cut . . . weeds and grass‖ and (2) ―remove or cause to be
removed . . . garbage, trash, rubbish and so on.‖ There is no contention that
demolishing Evanses‘ structures falls within the ―weeds-and-grass‖ liability
exception. We therefore understand the Club to contend that destroying the
structures was within the ―garbage-trash-rubbish-and-so-on‖ exception. The
question then is whether the Club has established as a matter of law that the
structures it destroyed are garbage, trash, rubbish, ―and so on.‖ We conclude the
Club has not met this burden.
―Garbage,‖ ―trash,‖ and ―rubbish‖ are synonyms that refer to worthless or
practically worthless things. ―Garbage‖ means ―refuse of any kind,‖ and ―refuse‖
is ―the worthless or useless part of something.‖ Webster‘s Third New International
Dictionary 935, 1910 (1993). Trash is ―something worth relatively little or
nothing.‖ Id. at 2432. And ―rubbish‖ is ―miscellaneous useless valueless waste or
rejected matter.‖ Id. at 1983.8
The Club‘s summary judgment fails to establish as a matter of law that the
structures were worth nothing or almost nothing when the Club destroyed them.
The Club supported its motion with affidavits, none of which state the structures‘
value, and photographs of the Evanses‘ property. We have reviewed the
photographs, and they do not conclusively establish that the structures were
worthless or practically so. The Club therefore failed to demonstrate as a matter of
law that its deed restrictions permitted demolition of the structures, and the trial
court erred to the extent it granted summary judgment based upon these
8
Under the rule of ejusdem generis, when ―general words follow a designation of
particular classes of things, the particular designation restricts the meaning of the general
words.‖ Martin v. Harris Cnty. Appraisal Dist., 44 S.W.3d 190, 195 n.3 (Tex. App.—Houston
[14th Dist.] 2001, pet. denied). Thus, the general phrase ―and so on‖ must also refer to valueless
or practically valueless things.
10
restrictions.
C. Subsection 204.010(a)(6) of the Property Code did not authorize
the Club to demolish the structures.
Under subsection 204.010(a)(6) of the Property Code, ―[u]nless otherwise
provided by the restrictions or the association‘s articles or bylaws, [a] property
owners‘ association . . . may . . . regulate the use, maintenance, repair,
replacement, modification, and appearance of the subdivision.‖ Tex. Prop. Code
Ann. § 204.010 (West 2007).9 The Club argues that demolishing the structures on
the Evanses‘ property was within this regulatory power. We disagree.
Chapter 204 of the Property Code does not define ―regulate,‖ see Tex. Prop.
Code Ann. § 204.001 (West 2007), and no ―more precise definition is apparent
from the term‘s use in [] context,‖ so we apply the ordinary meaning of the word.
TGS-NOPEC Geophysical Co. v. Combs, 340 S.W.3d 432, 439 (Tex. 2011). ―To
regulate‖ means ―to govern or direct according to rule . . . [or to] make regulations
for or concerning.‖ Webster‘s Third New International Dictionary 1913.
This power to govern by rule and to make regulations did not authorize the
Club to enforce its regulations by demolishing the Evanses‘ property. Indeed,
section 204.010 provides multiple enforcement mechanisms, none of which allow
for such self-help measures. For example, the statute allows associations to
―institute, defend, intervene in, settle or compromise litigation,‖ and to assess fees
and costs to property owners under certain circumstances. See, e.g. Tex Prop.
9
On appeal, the Club contends that subsections (a)(19) and (a)(21) of section 204.010 are
also ―relevant,‖ but the Club‘s motion for summary judgment relied exclusively upon subsection
(a)(6). Because we limit our analysis to the summary judgment grounds raised in the trial court,
we do not address the additional subsections that the Club raises for the first time on appeal. See
Rush v. Barrios, 56 S.W.3d 88, 97 (Tex. App.—Houston [14th Dist.] 2001, pet. denied) (―Our
review is limited to the issues presented to the trial court in the motion for summary judgment, as
the judgment may be affirmed only on grounds presented in the motion.‖).
11
Code Ann. § 204.010(a)(4), (8), (9), (10)–(12).
Because the statute specifically grants these limited enforcement powers, we
do not construe its authorization to ―regulate‖ as conferring the power to enforce
regulations by any means an association deems appropriate. Indeed, if the
authority to regulate in subsection (a)(6) included an unrestricted power to enforce,
the specific enforcement mechanisms cited above would be superfluous. We
therefore reject the Club‘s argument that section 204.010(a)(6) authorized its
demolition of the structures on the Evanses‘ property. Because the Club failed to
establish as a matter of law that it was authorized to demolish the structures, we
sustain the Evanses‘ first issue.
III. The Club is not entitled to summary judgment on its claims for fines
and costs because it failed to establish conclusively that it complied with
statutory notice requirements.
In their third issue, the Evanses contend that the trial court erred by
assessing statutory fines against them and awarding the Club its demolition and
clean up costs. The Evanses complain that ―they never got an opportunity to have
a hearing and [were] given no notice.‖10 We agree.11
Under the relevant version of section 209.006 of the Property Code,
10
In some circumstances, ―[l]ack of notice is an affirmative defense that must be pled.‖
See Mastin v. Mastin, 70 S.W.3d 148, 154 (Tex. App.—San Antonio 2001, no pet.). Here, the
Evanses did not plead lack of notice as an affirmative defense, but raised it in their response to
the Club‘s summary judgment motion. The Club has never argued that the Evanses failed to
plead lack of notice, so even assuming that the Evanses were obliged to raise the issue as an
affirmative defense, it was nonetheless tried by consent, so we address it. See Roark v.
Stallworth Oil & Gas, Inc., 813 S.W.2d 492, 494–95 (Tex.1991) (holding that unpled affirmative
defense may serve as basis for summary judgment when raised in summary judgment motion and
opposing party does not object because unpled claims or defenses tried by express or implied
consent of parties are treated as if they had been raised in pleadings).
11
In addition, the Club is not entitled to summary judgment for any demolition costs for
the reasons discussed in Part II above.
12
―[b]efore a property owners‘ association may . . . file a suit against an
owner . . . [or] levy a fine for a violation of the restrictions or bylaws
or rules of the association, the association or its agent must give
written notice to the owner by certified mail, return receipt requested.
. . . The notice must:
(1) describe the violation or property damage that is the basis
for the . . . charge[ ] or fine and state any amount due and
owing from the owner; and
(2) inform the owner that the owner:
....
may request a hearing under Section 209.007 [governing
hearings before property owners‘ association boards] on or
before the 30th day after the date that the owner receives the
notice.12
The Club‘s summary judgment evidence included three notices, but none of
them informed the Evanses of their statutory right to a hearing.13 Moreover,
although the Club now seeks to levy a fine of over $80,000 based upon the
Evanses‘ alleged violations, it never gave notice of its intent to assess this fine or
stated the amount that it would seek. As a result, the summary judgment evidence
does not establish as a matter of law that the Club complied with section 209.006,
as it must before ―fil[ing] a suit against [the Evanses] . . . [or] levy[ing] a fine.‖
Act of June 14, 2001, 77th Leg., R.S., ch. 926, 2001 Tex. Gen. Laws 1859
(amended 2011). The trial court therefore erred by granting summary judgment on
12
Act of June 14, 2001, 77th Leg., R.S., ch. 926, 2001 Tex. Gen. Laws 1859 (amended
2011) (current version at Tex. Prop. Code Ann. § 209.006 (West Supp. 2013)). The current
version of this statute took effect on January 1, 2012, and it also requires associations to inform
owners of ―special rights or relief related to the enforcement action under federal law, including
the Servicemembers Civil Relief Act (50 U.S.C. app. Section 501 et seq.), [that may be
available] if the owner is serving on active military duty.‖ Tex. Prop. Code Ann. § 209.006.
13
The third notice informed the Evanses of the estimated costs of the demolition and
clean-up, but nonetheless failed to apprise them of their right to a hearing before the board.
Thus, even assuming for argument‘s sake that the Evanses received the notice, which they deny,
the notice nonetheless fails to establish the Club‘s entitlement to summary judgment.
13
the Club‘s counter-claims, and we sustain the Evanses‘ third issue.
CONCLUSION
Having sustained the Evanses‘ first and third issues, we reverse the trial
court‘s judgment granting the Club‘s motion for summary judgment and
dismissing the Evanses‘ claims against the Club with prejudice, and we remand the
case for further proceedings. We affirm the trial court‘s order dismissing the
Evanses‘ claims against Casey Davis.
/s/ J. Brett Busby
Justice
Panel consists of Justices Boyce, Jamison, and Busby.
14