Rockwall Ranch Property Owners Association v. Joseph Gonzales, Daniel Estrada, and Jerry Werlla ( 2023 )

TEXAS COURT OF APPEALS, THIRD DISTRICT, AT AUSTIN
NO. 03-22-00004-CV
Rockwall Ranch Property Owners Association, Appellant
v.
Joseph Gonzales, Daniel Estrada, and Jerry Werlla, Appellees
FROM THE 433RD DISTRICT COURT OF COMAL COUNTY
NO. C2020-1418C, THE HONORABLE DIB WALDRIP, JUDGE PRESIDING
MEMORANDUM OPINION
In this permissive appeal, 1 Rockwall Ranch Property Owners Association (the
Association) appeals from the trial court’s order denying the Association’s motion for traditional
summary judgment. For the following reasons, we affirm the trial court’s order.
1 The trial court granted the Association permission to appeal from the trial court’s
interlocutory ruling, and this Court accepted the appeal. See Rockwall Ranch Prop. Owners
Ass’n v. Gonzales, No. 03-22-00004-CV, 2022 Tex. App. LEXIS 1732 (Tex. App.—Austin Mar.
11, 2022, order); see also Tex. Civ. Prac. & Rem. Code § 51.014(d) (authorizing appeal from
“order that is not otherwise appealable” in specified circumstances); Tex. R. Civ. P. 168
(requiring trial court to grant permissive appeal by order that identifies controlling question of
law and states why immediate appeal may advance ultimate termination of litigation); Tex. R.
App. P. 28.3 (addressing permissive appeals in civil cases).
BACKGROUND 2
Rockwall Ranch is a residential subdivision that is subject to dedicatory
instruments. In 2005, the Declaration of Covenants, Conditions, and Restrictions (Declaration)
governing the subdivision and the Association and the Bylaws of the Association were executed
and then recorded in Comal County’s real-property records.
The Declaration provides that the subdivision’s lot owners are mandatory
members of the Association and that Chapter 209 of the Texas Property Code governs the rights
and remedies of the Association and the lot owners:
The provisions of Chapter 209, Texas Property Code, as the same may be
amended from time to time, shall govern the rights and remedies of the
Association and Owner. In the event of an unintended conflict between this
declaration or the Bylaws and applicable law, applicable law shall control and this
Declaration and the Bylaws shall be deemed amended accordingly.
See Tex. Prop. Code § 209.003 (stating that chapter applies when subdivision’s lot owners are
mandatory members of property owners’ association). The Bylaws provide procedural rules for
administering the subdivision, including the role of the Association’s Board of Directors (the
Board) and the location and required notices for meetings. The Bylaws require an annual
meeting and allow for special meetings under specified situations. “Meetings of the Association
shall be held at such place as the Board of Directors may determine,” each lot has one vote, and
“[v]otes may be cast in person or by proxy.” The Bylaws are subject to amendment by the
2 Because the parties are familiar with the underlying facts of the case and its procedural
history and our analysis is limited to the resolution of questions of law, we do not recite the
underlying facts or procedural history in this opinion except as necessary to advise the parties of
the Court’s decision and the basic reasons for it. See Tex. R. App. P. 47.1 (“The court of appeals
must hand down a written opinion that is as brief as practicable but that addresses every issue
raised and necessary to final disposition of the appeal.”).
2
members at a regular or special meeting “by vote of two-thirds [of] a quorum of the Outstanding
Votes present in person or acting by proxy.”
Appellees, who are lot owners in the subdivision, sued the Association after a
dispute arose over the Association’s actions concerning its negotiation of an easement. Among
their allegations, appellees contended that the Association did not comply with its governing
provisions regarding meetings and voting. The Association counterclaimed, seeking declarations
that (i) its members “may vote by absentee ballot or by electronic ballot if the Board votes to
offer such methods,” and (ii) “[v]oting may take place outside of a meeting as long as members
are afforded notice of at least 20 days.” 3
The Association moved for traditional summary judgment on its counterclaim
based on Sections 209.0056 and 209.00592 of the Texas Property Code, which were enacted
after the 2005 Declaration and Bylaws. See Tex. Prop. Code §§ 209.0056, .00592; see also Act
of May 24, 2015, 84th R.S., ch. 1183, §§ 9, 14, 2015 Tex. Gen. Laws 3986, 3989, 3991
(currently codified at Tex. Prop. Code §§ 209.0056 and 209.00592). Focusing on the
subsections that expressly state that the sections supersede any contrary requirement in a
dedicatory instrument, see Tex. Prop. Code §§ 209.0056(b), .00592(f), the Association argued
that Section 209.00592 established the Board’s right to allow absentee or electronic voting “with
3 The Association also sought a declaration from the trial court that the voting
requirement of two-thirds of the members did not apply to the granting of the type of easement at
issue in the parties’ underlying dispute, but this requested relief is not at issue in this
permissive appeal.
3
respect to any voting item” and that Section 209.0056 established that votes “may be cast
without an actual in-person meeting.” 4
Section 209.00592 addresses voting rights of owners and states in relevant part,
(a) Subject to Subsection (a-1), the voting rights of an owner may be cast or
given: (1) in person or by proxy at a meeting of the property owners’ association;
(2) by absentee ballot in accordance with this section; (3) by electronic ballot in
accordance with this section; or (4) by any method of representative or delegated
voting provided by a dedicatory instrument.
(a-1) Except as provided by this subsection, unless a dedicatory instrument
provides otherwise, a property owners’ association is not required to provide an
owner with more than one voting method. An owner must be allowed to vote by
absentee ballot or proxy.
***
(f) This section supersedes any contrary provision in a dedicatory instrument.
See id. § 209.00592(a), (a-1), (f). Section 209.0056 addresses required notices for elections or
association votes, with subsection (a) addressing the required notices for “an election or vote
taken at a meeting of the owners,” subsection (a-1) addressing required notices when the election
or vote will not be taken at a meeting, and subsection (b) providing that this section “supersedes
any contrary requirement in a dedicatory instrument.” See id. § 209.0056.
Following a hearing, the trial court denied the Association’s motion for summary
judgment and then granted its motion for a permissive appeal. In its order granting the
permissive appeal, the trial court identified the controlling questions of law as its rulings on the
Association’s request for declarations that
4 According to the Association, the Board has attempted to conduct votes by absentee
ballot, electronically via email, and without allowing proxies.
4
(1) the Association’s members may vote by absentee ballot or by electronic ballot if the
Board votes to offer such methods; [and]
(2) voting may take place outside of a meeting as long as members are afforded notice of at
least 20 days.
See Tex. R. Civ. P. 168 (requiring, among others, trial court’s order allowing permissive appeal
to identify “controlling question of law as to which there is a substantial ground for difference
of opinion”).
ANALYSIS
In its two issues, the Association challenges the trial court’s rulings as to the
above identified questions of law. Relying on Sections 209.0056 and 209.00592 of the Texas
Property Code, the Association argues that its members may vote by absentee or electronic ballot
“if the Board votes to offer such methods” and that voting may take place “outside of a physical
meeting as long as members are given at least 20-days’ notice.”
Standard of Review
We review the trial court’s summary judgment ruling de novo. Joe v.
Two Thirty Nine Joint Venture, 145 S.W.3d 150, 156 (Tex. 2004). To prevail on a traditional
summary judgment motion, the movant must demonstrate that there are no genuine issues of
material fact and that it is entitled to judgment as a matter of law. See Tex. R. Civ. P. 166a(c);
Provident Life & Accident Ins. v. Knott, 128 S.W.3d 211, 215–16 (Tex. 2003).
The Association’s issues concern statutory construction, which we also review de
novo. See Texas Mun. Power Agency v. Public Util. Comm’n of Tex., 253 S.W.3d 184, 192
(Tex. 2007). Statutory construction “‘begins with the Legislature’s words,’ looking first to their
plain and common meaning.” El Paso Healthcare Sys., Ltd. v. Murphy, 518 S.W.3d 412, 418
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(Tex. 2017) (quoting Fitzgerald v. Advanced Spine Fixation Sys., Inc., 996 S.W.2d 864, 865–66
(Tex. 1999)); see also Presidio Indep. Sch. Dist. v. Scott, 309 S.W.3d 927, 930 (Tex. 2010)
(construing text according to “plain and common meaning unless a contrary intention is apparent
from the context or unless such a construction leads to absurd results” (citing City of Rockwall
v. Hughes, 246 S.W.3d 621, 625–26 (Tex. 2008))). “In conducting this analysis, ‘we look at the
entire act, and not a single section in isolation.’” Murphy, 518 S.W.3d at 418 (quoting
Fitzgerald, 996 S.W.2d at 865–66). This “text-based approach to statutory construction requires
us to study the language of the specific provision at issue, within the context of the statute as a
whole, endeavoring to give effect to every word, clause, and sentence.” Id. (quoting Ritchie
v. Rupe, 443 S.W.3d 856, 867 (Tex. 2014)); see Creative Oil & Gas, LLC v. Lona Hills Ranch,
L.L.C., 591 S.W.3d 127, 133 (Tex. 2019). “When the statute’s language ‘is unambiguous and
does not lead to absurd results, our search . . . ends there.’” Murphy, 518 S.W.3d at 418 (quoting
Texas Adjutant Gen.’s Office v. Ngakoue, 408 S.W.3d 350, 362 (Tex. 2013)).
Further, to the extent that the Association’s issues require us to interpret the
Declaration and Bylaws, we apply general rules of contract construction. See Tarr
v. Timberwood Park Owners Ass’n, 556 S.W.3d 274, 280 (Tex. 2018); Twin Creeks Golf Grp.,
L.P. v. Sunset Ridge Owners Ass’n, 537 S.W.3d 535, 540 (Tex. App.—Austin 2017, no pet.)
(citing Pilarcik v. Emmons, 966 S.W.2d 474, 478 (Tex. 1998)). “When interpreting a contract,
we examine the entire agreement in an effort to harmonize and give effect to all provisions of the
contract so that none will be meaningless.” MCI Telecomms. Corp. v. Texas Utils. Elec. Co.,
995 S.W.2d 647, 652 (Tex. 1999). We generally interpret language within a contract according
to its “plain, ordinary, and generally accepted meaning.” Piranha Partners v. Neuhoff,
596 S.W.3d 740, 742–43 (Tex. 2020) (citation omitted).
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Section 209.00592
In its first issue, the Association argues that Section 209.00592 authorizes the
Board to offer voting by absentee or electronic ballot to its members. See Tex. Prop. Code
§ 209.00592. The Association argues that although the listed methods for voting in Section
209.00592(a) are not required to be offered, they are allowed without the necessity of amending
the Declaration or Bylaws. The Association’s interpretation of Section 209.00592 is that it
“specifically require[s] that such [listed] methods be permitted in every association governed by
Chapter 209” without “requir[ing] an amendment to the dedicatory instruments (including
bylaws),” but that it also provides that “if a dedicatory instrument provides for another type of
representative voting, that may be allowed as well.” As support for its proposed interpretation,
the Association relies on subsection (f), which states that “[t]his section supersedes any contrary
provision in a dedicatory instrument,” and the legislature’s inclusion of language in Section
209.00593 (a provision addressing the election of board members) that authorizes boards to
amend their associations’ bylaws “to provide for elections to be held as required by its
subsection (a).” See id. §§ 209.00592(f), .00593(a), (b). Comparing Section 209.00593(b) with
Section 209.00592, the Association argues that the legislature “knew how to include bylaw
amendment language[] and did not do so in Section 209.00592.”
As a threshold matter, we conclude that the relevant statutory text, the
Declaration, and Bylaws are not ambiguous, and thus, we interpret them according to their plain
and common meaning. See Piranha Partners, 596 S.W.3d at 742–43; Scott, 309 S.W.3d at 930.5
5 The Association also relies on legislative history to support its proposed interpretation
of the statutory language. Because we interpret the statutory provisions based on their clear and
unambiguous language, we do not consider the legislative history. See City of Round Rock
7
Subsection (a-1) plainly states that, unless a dedicatory instrument provides otherwise, an
association is not required to provide an owner with more than one voting method, subject to the
requirement that it provide either voting by absentee ballot or proxy. See Tex. Prop. Code
§ 209.00592(a-1). In other words, a dedicatory instrument may offer multiple methods of voting,
but it must offer voting by absentee ballot or proxy. The dedicatory instruments here, the
Declaration and Bylaws, do not address electronic or absentee ballots, but the Bylaws expressly
provide two methods of voting: in person or by proxy. Because the Bylaws expressly provide
two methods of voting with one of the methods being by proxy, the Bylaws are not in conflict
with Section 209.00592. Thus, it follows that subsection (f) does not apply to supersede the
voting methods that are provided in the Bylaws. See id. § 209.00592(f).
We also observe that in contrast to the mandatory language in subsection (a-1)—
“An owner must be allowed to vote by absentee ballot or proxy”—subsection (a) contains
permissive language—“the voting rights of an owners may be cast or given.” See id.
§ 209.00592(a), (a-1); see also Tex. Gov’t Code § 311.016(1) (“‘May’ creates discretionary
authority or grants permission or a power.”), (3) (“‘Must’ creates or recognizes a condition
precedent.”). The plain language of the statutory text makes clear that the voting methods listed
in subsection (a) are approved for use going forward, but the Association’s expanded
interpretation of this text—that a board is authorized to utilize each of the voting methods in
subsection (a) on an ad hoc basis without regard to its dedicatory instruments—would require us
to insert language into the statute that is not there. See Jaster v. Comet II Constr., Inc.,
438 S.W.3d 556, 562 (Tex. 2014) (explaining that courts “must enforce the statute ‘as written’
v. Rodriguez, 399 S.W.3d 130, 137 (Tex. 2013) (“When a statute is clear and unambiguous, we
do not resort to extrinsic aids such as legislative history to interpret the statute.”).
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and ‘refrain from rewriting text that lawmakers chose’” (quoting Entergy Gulf States, Inc.
v. Summers, 282 S.W.3d 433, 443 (Tex. 2009)); Fortis Benefits v. Cantu, 234 S.W.3d 642, 649
n.41 (Tex. 2007) (stating that courts “should not by judicial fiat insert non-existent language
into statutes”).
Applying the plain language of Section 209.00592 to the Bylaws, we conclude
that the Association did not establish that its members may vote by absentee ballot or by
electronic ballot “if the Board votes to offer such methods.” In other words, the statute’s plain
language does not support that the Board can offer these methods if they are not authorized by
the Bylaws. We overrule the Association’s first issue.
Section 209.0056
In its second issue, relying on subsections (a-1) and (b) of Section 209.0056, the
Association argues that the owners may vote outside of a “physical meeting as long as members
are given at least 20 days’ notice.” These subsections state in relevant part:
(a-1) For an election or vote of owners not taken at a meeting, the property
owners’ association shall give notice of the election or vote to all owners entitled
to vote on any matter under consideration. The notice shall be given not later than
the 20th day before the latest date on which a ballot may be submitted to
be counted.
(b) This section supersedes any contrary requirement in a dedicatory instrument.
Tex. Prop. Code § 209.0056(a-1), (b). As was the case with the relevant statutory text in Section
209.00592, we conclude that the relevant text in Section 209.0056 is not ambiguous, and thus,
we interpret it according to its plain and common meaning. See Scott, 309 S.W.3d at 930.
The Association argues that subsection (a-1) in and of itself authorizes voting
outside of a meeting, but Section 209.0056 is a notice provision. It is titled “Notice of Election
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or Association Vote” and addresses the required notices for votes to be taken at a meeting of the
owners (subsection (a)) and outside a meeting (subsection (a-1)). See Tex. Prop. Code
§ 209.0056(a) (addressing notice requirements for elections or votes at meeting of owners), (a-1)
(addressing notice requirements for election or voting of owners not taken at meeting); see also
Tex. Gov’t Code § 311.016(2) (“‘Shall’ imposes a duty.”). When viewed in the context of the
other subsections, subsection (b) is directed to notice provisions in a dedicatory instrument that
are contrary to the minimum notice requirements in subsections (a) and (a-1), and subsection
(a-1) in and of itself does not authorize voting outside of a meeting. See Tex. Prop. Code
§ 209.0056(a), (a-1), (b). It follows that a dedicatory instrument that does not provide for voting
outside a meeting is not impacted by the notice requirements in (a-1) and that, in this situation,
subsection (b) does not apply. See id.
As the trial court explained in its order denying the Association’s motion for
summary judgment:
To the extent that a dedicatory instrument requires an amount of notice contrary
to the notice required by either subsection (a) or (a-1), it is superseded by this
law . . . .
[The Association] assert[s] the existence of language (in this “Notice” statute) that
spells out what notice is required for votes not taken at a meeting gives the
Association the green light to hold such votes, i.e., electronic. Very simply, the
“Notice” statute neither expressly or implicitly does any such thing. . . . Rather,
Section 209.0056 is clearly intended to address issues of fair notice of elections,
and it was not meant, in and of itself, to create or allow any additional methods of
voting. Likewise, subsection [(b)] which supersedes provisions to the contrary is
designed to affect only such “notice” conflicts.
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We agree with the trial court’s analysis, conclude that the Association did not establish that
voting may take place outside of a meeting as long as members are afforded notice of at least
twenty days, and overrule its second issue. 6
CONCLUSION
For these reasons, we affirm the trial court’s order denying the Association’s
motion for traditional summary judgment.
__________________________________________
Rosa Lopez Theofanis, Justice
Before Justices Baker, Triana, and Theofanis
Affirmed
Filed: April 6, 2023
6
The Association also argues that the provision in its Bylaws that authorizes the Board to
determine where meetings are held allows for “votes not taken in person.” That provision
provides: “Meetings of the Association shall be held at such place as the Board of Directors may
determine.” The Association argues that this provision allows the Board to hold “virtual”
meetings, but that argument is different from the one it made in its motion for summary
judgment. Whether the Board may hold a meeting “virtually” is a different question from
whether “[v]otes may take place outside of a meeting.” Thus, we may not consider the Board’s
alternative argument as a ground for reversing the trial court’s summary judgment ruling. See
Tex. R. Civ. P. 166a(c) (“Issues not expressly presented to the trial court by written motion,
answer or other response shall not be considered grounds for reversal.”).
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