Kenneth H. Tarr v. Timberwood Park Owners Association Inc. , 510 S.W.3d 725 ( 2016 )

Fourth Court of Appeals
San Antonio, Texas
OPINION
No. 04-16-00022-CV
Kenneth H. TARR,
Appellant
v.
TIMBERWOOD PARK OWNERS ASSOCIATION INC.,
Appellee
From the County Court at Law No. 3, Bexar County, Texas
Trial Court No. 2014CV02779
Honorable David J. Rodriguez, Judge Presiding
Opinion by: Karen Angelini, Justice
Sitting: Karen Angelini, Justice
Marialyn Barnard, Justice
Rebeca C. Martinez, Justice
Delivered and Filed: November 16, 2016
AFFIRMED AS MODIFIED
At issue in this appeal is whether the deed restrictions for Timberwood Park Owners
Association, Inc. (“the Association”), which provide that homes should be “used solely for
residential purposes,” prevent homeowner Kenneth H. Tarr from leasing his home for short periods
of time to individuals who have no intent to remain in the home. We conclude that the deed
restrictions do prevent such activity; therefore, the trial court did not err in granting summary
judgment. However, because the trial court’s judgment granted the Association injunctive relief in
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the absence of pleading for such relief, we modify those parts of the judgment that grant the
Association injunctive relief and affirm the judgment as modified.
BACKGROUND
In 2012, Tarr bought a single-family home located in the Timberwood Park subdivision of
San Antonio. In 2014, when his employer transferred him to Houston, he began advertising his
San Antonio home online for the purpose of renting his home for short periods of time. To manage
the home, Tarr formed a limited liability company called “Linda’s Hill Country Home LLC.” From
June 2014 to October 2014, Tarr entered into thirty-one short-term rental agreements ranging from
one to seven days, totaling about 102 days. As a practice, Tarr leased the entire home rather than
individual rooms, and paid Texas Hotel Tax, which is applicable to all rentals of less than thirty
days. Tarr also remitted the San Antonio/Bexar County Hotel/Motel Tax, which applies to rentals
of less than 30 days. In July and September 2014, Tarr was notified by the Association that he was
using the home as a commercial rental property rather than for residential purposes as required by
the deed restrictions. On September 2, 2014, at a hearing before the Association’s board, his appeal
of fines was denied.
Tarr then filed a declaratory judgment action and a claim for breach of restrictive covenant
against the Association, seeking a declaration that the deed restrictions do not impose duration
limits on leasing. The Association filed a general denial and a request for attorney’s fees pursuant
to section 37.009 of the Texas Rules of Civil Practice and Remedies Code.
Tarr and the Association then filed cross traditional motions for summary judgment. The
trial court granted the Association’s motion for summary judgment and denied Tarr’s motion. In a
separate final order, the trial court granted the Association attorney’s fees. Tarr appealed.
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RESTRICTIVE COVENANT
We review a trial court’s ruling on a motion for summary judgment de novo. Joe v. Two
Thirty Nine Joint Venture, 145 S.W.3d 150, 156 (Tex. 2004). Summary judgment is proper only if
the movant establishes that there is no genuine issue as to any material fact and that it is entitled
to judgment as a matter of law. Id.; see TEX. R. CIV. P. 166a(c). When, as here, both parties seek
summary judgment and the court grants one and denies the other, we render the judgment that the
trial court should have rendered. City of Garland v. Dallas Morning News, 22 S.W.3d 351, 356
(Tex. 2000).
Further, we review a trial court’s interpretation of restrictive covenants de novo. Buckner
v. Lakes of Somerset Homeowners Ass’n, Inc., 133 S.W.3d 294, 297 (Tex. App.—Fort Worth 2004,
pet. denied). When construing restrictive covenants, we apply general rules of contract
construction. Pilarcik v. Emmons, 966 S.W.2d 474, 478 (Tex. 1998); Buckner, 133 S.W.3d at 297.
As when interpreting any contract, our primary duty in construing a restrictive covenant is to
ascertain the parties’ intent from the instrument’s language. Bank United v. Greenway
Improvement Ass’n, 6 S.W.3d 705, 708 (Tex. App.—Houston [1st Dist.] 1999, pet. denied). In
doing so, we construe the language of the restrictions to give effect to their purposes and intent
and to harmonize all of the provisions so that none are rendered meaningless. Rakowski v.
Committee to Protect Clear Creek Village Homeowners’ Rights, 252 S.W.3d 673, 676 (Tex.
App.—Houston [14th Dist.] 2008, pet. denied). We give a restrictive covenant’s words and phrases
their commonly accepted meaning. Truong v. City of Houston, 99 S.W.3d 204, 214 (Tex. App.—
Houston [1st Dist.] 2002, no pet.).
Whether restrictive covenants are ambiguous is a question of law. Pilarcik, 966 S.W.2d at
478. We examine the covenants “as a whole in light of the circumstances present when the parties
entered the agreement.” Id. A covenant is unambiguous if, after appropriate rules of construction
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have been applied, the covenant can be given a definite or certain legal meaning. Id. In contrast,
if, after appropriate rules of construction have been applied, a covenant is susceptible of more than
one reasonable interpretation, the covenant is ambiguous. Id.
Covenants restricting the free use of land are not favored by the courts, but will be enforced
if they are clearly worded and confined to a lawful purpose. Wilmoth v. Wilcox, 734 S.W.2d 656,
657 (Tex. 1987); Jennings v. Bindseil, 258 S.W.3d 190, 194-95 (Tex. App.—Austin 2008, no pet.).
When the language of a restrictive covenant is unambiguous, section 202.003(a) of the Property
Code requires that the restrictive covenant be liberally construed to give effect to its purpose and
intent. Jennings, 258 S.W.3d at 195; see TEX. PROP. CODE ANN. § 202.003(a) (West 2014). On the
other hand, if a restrictive covenant is ambiguous, we resolve all doubts in favor of the free and
unrestricted use of the property, strictly construing any ambiguity against the party seeking to
enforce the restriction. Wilmoth, 734 S.W.2d at 657; Jennings, 258 S.W.3d at 195.
The restrictive covenant at issue in this appeal provides the following:
All tracts shall be used solely for residential purposes, except tracts designated on
the above mentioned plat for business purposes, provided, however, no business
shall be conducted on any of these tracts which is noxious or harmful by reason of
odor, dust, smoke, gas fumes, noise or vibration . . . .”
Tarr argues that nothing in the language of this restrictive covenant prevents a homeowner
from leasing his home on a short-term basis. According to Tarr, the individuals to whom he leases
are using the home for living purposes and thus are not violating the requirement that the home be
used for residential purposes. Tarr points to the fact that the Association has admitted the restrictive
covenant allows a homeowner to lease a home for residential purposes and that there is no
requirement a homeowner personally occupy his home. According to Tarr, there is no difference
between such a permitted renter and those individuals to whom he leases on a short-term basis.
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The Association responds that Tarr’s short-term renters are not residents and are thus not
using the home solely for residential purposes; instead they are using the home for transient
purposes. In support of its argument, the Association points to this Court’s opinion in Munson v.
Milton, 948 S.W.2d 813 (Tex. App.—San Antonio 1997, writ denied), where this Court held that
similar language in a restrictive covenant prohibited short-term leases to vacationers.
In Munson, the homeowner rented his house, which was located in the Chisum’s
Subdivision, to third parties through “Rio Frio Bed n Breakfast and Lodging,” a professional rental
agent. Id. at 815. The third parties were generally vacationers who used the property for short
periods of time, generally two to five days. Id. Other owners in the Chisum’s Subdivision filed suit
against the homeowner, seeking a temporary and permanent injunction to prohibit him from
renting his house in violation of a restrictive covenant. Id. The restrictive covenant provided the
following:
All tracts within the Chisum’s subdivision shall be used solely for residential,
camping or picnicing purposes and shall never be used for business purposes.
Motel, tourist courts, and trailer parks shall be deemed to be a business use.
Id. at 815. The trial court granted the other owners a temporary injunction enjoining the
homeowner from “renting and/or leasing said property to the public for lodging, vacation and
recreation purposes.” Id. The homeowner filed an interlocutory appeal of the trial court’s
temporary injunction, contending the temporary injunction imposed an unlawful restraint on the
alienation of his property. Id.
Noting that the language of the restrictive covenant was unambiguous, this Court applied
section 202.003 of the Texas Property Code, explaining that in construing the intent of the framers
of the restrictive covenant, it would “liberally construe the covenant’s language and . . . ensure that
every provision is given effect.” Id. at 816. This Court explained that “[a]lthough the term
‘residence’ is given a variety of meanings, residence generally requires both physical presence and
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an intention to remain.” Id. “If a person comes to a place temporarily, without any intention of
making that place his or her home, that place is not considered the person’s residence.” Id.
Additionally, this Court emphasized that the “Texas Property Code draws a distinction between a
permanent residence and transient housing, which includes rooms at hotels, motels, inns and the
like.” Id. at 817.
Further, this Court noted that “[a]lthough the venue statutes permit a defendant to have a
residence in two or more counties, the residence must be occupied over a substantial period of time
and must be permanent rather than temporary in order to qualify as a second residence.” Id.
According to this Court, “[j]ust as the foregoing cases and statutory provisions draw distinctions
between temporary or transient housing and a residence,” the framers of the restrictive covenant
intended to draw a similar distinction between residential and transient uses. Id. It noted that “[a]t
least two of the activities listed as business uses in this sentence are directed at transient-type
housing.” Id. Thus, this Court concluded that because the restrictive covenant prohibited the
homeowner from leasing the home for such transient purposes, the other owners had “established
a probable violation of the restrictive covenant.” Id.
Tarr stresses that Munson is not mandatory authority as it dealt with the appeal of a
temporary injunction; however, we find the reasoning in Munson persuasive. As in Munson, the
term “used solely for residential purposes” has a definite legal meaning and is unambiguous. See
id. at 815. Therefore, like Munson, we apply section 202.003 of the Texas Property Code and
liberally construe the restrictive covenant to give effect to its purpose and intent. See id. at 816;
see also TEX. PROP. CODE ANN. § 202.003 (West 2014).
We also agree with Munson that the term “residence” “generally requires both physical
presence and an intention to remain.” Munson, 948 S.W.2d at 816. Thus, “[i]f a person comes to a
place temporarily, without any intention of making that place his or her home, that place is not
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considered the person’s residence.” Id. at 817. Instead, those persons are using a home for transient
purposes. Id. And, as in Munson, we draw a distinction between “residential” purposes and
“transient” purposes. See id. at 816-17. One leasing his home to be used for transient purposes is
not complying with the restrictive covenant that it be used solely for residential purposes. See also
Benard v. Humble, 990 S.W.2d 929, 931-32 (Tex. App.—Beaumont 1999, pet. denied) (holding
that homeowner’s short term rental of home violated deed restriction that home could be used only
for “single-family residence purposes”).
Here, the record is clear that Tarr, through Linda’s Hill Country Home LLC, leased his
home to be used for transient purposes. The leasing agreement between Linda’s Hill Country
Home and its “guests” discusses a “check-in” time of 4:00 p.m. and a “check-out” time of 11:00
a.m. The agreement requires “a two-night minimum stay” and states that a “two-night rate” will
be charged to guests who leave early. The agreement provides for a full refund if a cancellation is
made more than thirty days prior to arrival, but does not provide for any refund if a cancellation is
made less than thirty days. The leasing agreement is not consistent with a renter who has the intent
to remain at the home; the agreement thus shows that the home is being used for transient purposes
rather than residential purposes. Furthermore, the record shows that Tarr paid hotel state and
municipal hotel taxes. We therefore find the trial court did not err in granting summary judgment
in favor of the Association and ordering that Tarr take nothing on his claims.
We recognize that our sister court in Austin has found no violation of a restrictive covenant
under similar circumstances. In Zgabay v. NBRC Property Owners Association, No. 03-14-00660-
CV, 2015 WL 5097116, at *3 (Tex. App.—Austin Aug. 28, 2015, pet. denied) (mem. op.), the
Austin Court of Appeals determined that the covenant restricting homes to be used “for single
family residential purposes” was ambiguous. The court thus did not apply the requirement in
section 202.003(a) of the Texas Property Code that a restrictive covenant be liberally construed to
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give effect to its purpose and intent. Instead, by determining the language to be ambiguous, the
Austin Court of Appeals “resolve[d] the ambiguity against the Association and in favor of the
[homeowner’s] free and unrestricted use of their property.” Id. It therefore held that the trial court
erred in granting summary judgment in favor of the homeowners’ association. Id. We respectfully
disagree with the Austin Court of Appeals and do not find its reasoning persuasive.
INJUNCTIVE RELIEF
In its order granting the Association’s motion for summary judgment and denying Tarr’s
partial motion for summary judgment, the trial court granted injunctive relief to the Association.
Specifically, the trial court ordered the following relief:
It is therefore ORDERED that Plaintiff immediately cease operating a business on
his residential lot. This applies to Plaintiff, or his tenants, assigns, heirs or
successors.
It is further ORDERED that [neither] Plaintiff, nor his tenants, assigns, heirs or
successors, shall allow or cause the Property to be rented, sub-rented, leased or
subleased for short-term rentals to multi-family parties.
It is further ORDERED that neither Plaintiff, nor his tenants, assigns, heirs or
successors, shall allow or cause the Property to be rented, sub-rented, leased or
subleased to any person or the public for temporary or transient purposes.
Tarr complains that the trial court erred in granting such injunctive relief because the
Association never made an affirmative claim for injunctive relief. The Association merely filed a
general denial and a claim for attorney’s fees in defending the declaratory judgment action. We
agree with Tarr.
“An applicant for injunctive relief must demonstrate (1) the existence of a wrongful act;
(2) the existence of imminent harm; (3) the existence of irreparable injury; and (4) the absence of
an adequate remedy at law.” Webb v. Glenbrook Owners Ass’n, Inc., 298 S.W.3d 374, 384 (Tex.
App.—Dallas 2009, no pet.). “Persons seeking the extraordinary remedy of injunction must be
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specific in pleading the relief sought, and courts are without authority to grant relief beyond that
so specified.” Id. Without a pleading to support injunctive relief, the trial court erred in granting
such relief in its order. 1
CONCLUSION
Because the record shows that Tarr was using his home for transient purposes and not
solely residential purposes in violation of the restrictive covenant, the trial court correctly granted
summary judgment in favor of the Association and rendered a take-nothing judgment against Tarr.
However, because the Association never pled for injunctive relief, the trial court erred in granting
such relief. Therefore, the trial court’s judgment is modified to delete those parts of the judgment
that grant injunctive relief, and the judgment is affirmed as modified.
Karen Angelini, Justice
1
We note that Tarr also claims that the trial court “found violations of the deed restrictions even though the HOA never
pled breach of restrictive covenant or pursued it at summary judgment.” We disagree that the trial court in its summary
judgment order and subsequent final order found a breach of restrictive covenant. Instead, the trial court in its summary
judgment gave reasons for its decision to award summary judgment and render a take-nothing judgment against Tarr.
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