Opinion issued=20
November 15, 2007
<=
BR>
In The
Court of=20
Appeals
For=20
The
First =
District of=20
Texas
NO.=20
01-05-00961-CV
FRANS =
GILLEBAARD=20
and DIANE GILLEBAARD, Appellants
V.
BAYVIEW ACRES=20
ASSOCIATION, INC., ABBOTT SPRAGUE, LLOYD =
THORTON, ![3DFootnote](3D"")
JAMES =
FLANIGAN,=20
and CHARLIE PRIOLEAU, Appellees
On =
Appeal from the=20
405th District Court
Galveston County,=20
Texas
Trial =
Court Cause=20
No. 04CV1080
O P I N I O N
&nbs=
p; Appellants, Frans and Diane Gillebaard =
(=E2=80=9Cthe=20
Gillebaards=E2=80=9D), =
challenge the trial=20
court=E2=80=99s rendition of summary judgment in favor of =
appellees, Abbott=20
Sprague, Lloyd Thorton, James Flanigan, and Charlie Prioleau =
(=E2=80=9Cthe Individual =
Appellees=E2=80=9D) and Bayview Acres=20
Association, Inc. (=E2=80=9CBayview Association=E2=80=9D); its =
declaration that the=20
=E2=80=9CAmended and =
Restated Restrictions=20
for Bayview Acres=E2=80=9D subdivision were valid and enforceable; and its denial of =
the=20
Gillebaards=E2=80=99 cross-motion=20
for partial summary judgment.=20
We determine whether the trial court =
erred in=20
granting appellees=E2=80=99 motions for summary judgment and in =
denying the=20
Gillebaards=E2=80=99 motion for partial summary judgment because, =
as argued by the=20
Gillebaards, the procedures =
for=20
amending deed restrictions under sections 204.005 and 204.006 of =
the Texas=20
Property Code were not followed.=20
See Tex. Prop. =
Code Ann.=20
=C2=A7=C2=A7 204.005, 204.006 (Vernon 2007). We reverse the =
judgment in part,=20
we affirm it in part, and we =
remand the cause for further proceedings =
and with=20
instructions.
Background
=
Bayview=20
Acres is a residential real estate subdivision in Galveston =
County, Texas.=20
Bayview Acres has had deed restrictions in effect for =
more than=20
70 years. In September 1995, the Gillebaards acquired five lots=20
in Bayview=20
Acres that totalled =
more than six=20
acres. In 1999, a petition was circulated to the property owners =
in=20
Bayview Acres for the purpose of amending Bayview Acres=E2=80=99 =
deed restrictions=20
pursuant to chapter 201 of the Texas Property Code. =
The 1999 =
modifications were=20
adopted by the property owners of Bayview Acres. =
The deed =
restrictions=20
affecting the Gillebaards=E2=80=99 property in Bayview Acres at =
the time that=20
appellees attempted to modify the restrictions (=E2=80=9Cthe 1999 =
express deed =
restrictions=E2=80=9D)=20
provided, in relevant part:
1.No garage or =
outbuilding=20
shall be erected on said property to be permanently used as a =
residence,=20
and in no case shall a garage be used as a residence to exceed =
twelve (12)=20
months from the beginning of the erection of said garage.=20
2.No residence or=20
outbuilding shall be left unpainted.
3.No yard toilet =
shall be=20
erected on said property, and the Grantees specifically agree to =
construct=20
a cesspool or install septic tank or a similar contrivance for =
sewage=20
disposal, to which toilet shall be connected.
4.Property =
conveyed in=20
BAYVIEW ACRES during the period of time that the restrictions =
herein set=20
forth are in effect, shall be used only for residence purposes=20
[hereinafter referred to as the =E2=80=9Cresidential-use=20
restriction=E2=80=9D].
5.The extended or new (if the=20
restrictions have lapsed for any reason) restrictions will be =
effective=20
for a term of 10 years from January 1, 2000, after which period =
the=20
restrictions will be automatically extended for successive periods =
of 10=20
years, unless within one year prior to any such automatic renewal =
date, 75=20
percent of the then property owners of Bayview Acres file a =
petition=20
declaring that the automatic extension shall not=20
occur.
The only exception to =
the=20
residential-use restriction was granted to the Texas Corinthian =
Yacht Club=20
in 1937.
=
In=20
July 2004, the Gillebaards contracted with South Texas Projects, =
Inc. (=E2=80=9C=20
the Condominium Developer=E2=80=9D) to sell their property. The =
contract=20
specifically provided that the Gillebaards=E2=80=99 property was =
being acquired=20
for the construction of a residential condominium development. The =
Gillebaards agreed that the Condominium Developer could conduct a=20
=E2=80=9Cfeasibility study=E2=80=9D to determine whether the =
Gillebaards=E2=80=99 property could=20
be developed for its intended purpose.
=
On=20
August 20, 2004, the Individual Appellees filed written notice of =
the=20
formation of a property owners=E2=80=99 association petition =
committee.=20
See=20
Tex. Prop. Code=20
Ann. =
=C2=A7=C2=A7 =
201.005(a), 204.006(a)(1)=20
(Vernon=20
2007). The August 20=20
formation-of-a-petition-committee notice stated =
that a=20
petition committee =E2=80=9Cwas formed for the sole purpose of =
creating and=20
operating a property owners=E2=80=99 association as set forth in =
Article II of the=20
proposed Amended and Restated Restrictions for Bayview =
Acres.=E2=80=9D The August=20
20 formation-of-a-petition-committee =
notice attached and incorporated by =
reference the=20
Amended and Restated Restrictions for Bayview Acres =
(=E2=80=9Cthe Amended and =
Restated=20
Restrictions=E2=80=9D), which sought=20
. . . to add to and [to] =
modify the=20
[1999 express deed] restrictions for Bayview Acres in the =
following order:=20
(i) first by adding provisions to the restrictions for the purpose =
of=20
creating and operating the Association so that the Association is =
a=20
designated representative of the owners of property within Bayview =
Acres=20
subdivision, as authorized by Texas Property Code Section 204.006; =
and=20
then (ii) adding to, modifying and restating the restrictions for =
Bayview=20
Acres as set forth [in the document].
Specifically, the =
Amended=20
and Restated Restrictions, in pertinent part, modified the =
residential-use=20
restriction to require=20
that all property =
in Bayview=20
Acres be used for single-family residential purposes (=E2=80=9Cthe =
single-family-use restriction=E2=80=9D). Also on August 20, =
2004, the=20
articles of incorporation for Bayview Acres Association, Inc. =
(=E2=80=9CBayview=20
Association=E2=80=9D) were filed with the Texas Secretary of=20
State.
=
The petition committee =
circulated the=20
Amended and Restated Restrictions as a petition to Bayview =
Acres=20
property owners (=E2=80=9Cthe petition=E2=80=9D). On August 23, =
2004,
three days after the =
August 20=20
formation-of-a-petition-committee notice =
was filed, the =
petition=20
committee filed the Amended and Restated Restrictions, which had =
been=20
approved by more than 75 percent of the property owners in Bayview =
Acres. See =
id. =C2=A7=C2=A7=20
204.005(a), 204.006(a). On September 27, 2004, the=20
Gillebaards filed =
a=20
=E2=80=9CStatement of Exclusion from Amended and Restated =
Restrictions for Bayview=20
Acres=E2=80=9D pursuant to section 201.009 of the Texas Property=20
Code to have their property=20
=E2=80=9Cdeleted and excluded from Amended And =
Restated=20
Restrictions for Bayview Acres.=E2=80=9D See id. =C2=A7 201.009(b)(4) =
(Vernon 2007).=20
On September 27, =
2004, the=20
Gillebaards filed suit against the Individual Appellees and =
Bayview=20
Association, seeking declaratory judgment that (1) the Amended and =
Restated Restrictions were invalid or unenforceable because =
appellees had not complied =
with the=20
requirements of chapter 204 of the Texas Property Code;=20
(2) alternatively, =
the Amended=20
and Restated Restrictions did not apply to =
the=20
Gillebaards=E2=80=99 property because they had opted out under =
chapter 201 of the=20
Texas Property Code; and (3) alternatively still, the Amended and =
Restated=20
Restrictions were invalid or unenforceable=20
because of the =
changed=20
character of Bayview Acres. The Gillebaards also sought a=20
declaration that the title =E2=80=9Cto their property is not =
encumbered by any=20
cloud evidenced or created by=E2=80=9D the Amended and Restated=20
Restrictions. The Gillebaards also asserted against =
the=20
Individual Appellees a claim for tortious interference with their=20
contractual relationship =
with the=20
Condominium Developer. On October 19, 2004, the Condominium =
Developer=20
terminated its contract to purchase the Gillebaards=E2=80=99 =
property because the=20
single-family residence restriction made the construction of a =
residential=20
condominium development unfeasible.
=
On=20
April 4, 2005, the Gillebaards filed a rule 166a(c) motion for =
partial=20
summary judgment against appellees. See =
Tex. R. Civ. P.=20
166a(c). The =
Gillebaards=20
moved for summary judgment on their declaratory-judgment cause of =
action=20
on the grounds that the Amended and Restated Restrictions=20
were invalid or unenforceable because =
appellees=20
had not complied with the requirements of chapter 204 of the Texas =
Property Code and, =
alternatively, because=20
the Amended and Restated Restrictions did not apply to =
the=20
Gillebaards=E2=80=99 property because they had opted out under =
chapter 201 of the=20
Texas Property Code.
=
On=20
May 17, 2005, Bayview Association =
responded=20
to the Gillebaards=E2=80=99 motion for partial summary judgment =
and filed its own=20
rule 166a(c) motion for summary =
judgment,
against all of their claims, on the =
grounds that=20
(1) the Amended and =
Restated=20
Restrictions were valid and enforceable because =
appellees had=20
complied with the requirements of chapter 204 of=20
the Texas Property Code and (2) the =
historical=20
growth and development of Bayview Acres did not invalidate the =
Amended and Restated=20
Restrictions. On the same day, =
the=20
Individual Appellees also responded to the Gillebaards=E2=80=99 =
rule 166a(c)=20
motion for partial summary judgment and filed their own rule =
166a(c)=20
motion for partial summary judgment on the ground that the Amended and Restated =
Restrictions=20
were valid and enforceable because =
appellees had=20
complied with the requirements of chapter 204 of the Texas =
Property=20
Code. The Individual =
Appellees=E2=80=99=20
summary-judgment motion did not address the tortious-interference =
claim=20
alleged against them.
=
In=20
three summary-judgment orders signed August 25, 2005, the trial =
court=20
denied the Gillebaards=E2=80=99 motion for partial summary =
judgment, granted=20
appellees=E2=80=99 motions for summary judgment, and =
declared, =E2=80=9CThe Amended=20
And Restated Restrictions for Bayview Acres which were enacted on =
August=20
23, 2004 and approved by owners representing approximately 83% of =
property=20
within Bayview Acres are valid and enforceable.=E2=80=9D=20
The trial court did not state =
the=20
grounds for its rulings. The Gillebaards=20
considered these three orders to have defeated not =
only=20
their declaratory-judgment requests, but also their =
tortious-interference=20
claim for damages against the Individual Appellees, as the latter =
claim=20
was predicated on the Amended and Restated Restrictions=E2=80=99 =
being invalid. In=20
an abundance of caution,
on August 30, =
2005, the=20
Gillebaards moved the trial court to dismiss without prejudice =
=E2=80=9Cany claim=20
for damages from [appellees] which is not predicated upon the =
issue=20
determined in [appellees=E2=80=99] favor on motion for summary =
judgment, and which=20
would remain viable in the face of the Court=E2=80=99s order =
granting [appellees=E2=80=99]=20
summary judgment motions effectively upholding the validity of the =
Amended=20
and Restated Restrictions . . . .=E2=80=9D =
On November 7, =
2005,=20
the trial court granted their motion to =
dismiss,=20
dismissing without prejudice any claims for damages that might =
have=20
survived the summary-judgment rulings.
On that same date, the trial court=20
denied =
appellees=E2=80=99 motions=20
for attorney=E2=80=99s fees, rendering the judgment final.
Summary=20
Judgment
<=
/SPAN>In two issues, the Gillebaards contend that =
the trial=20
court erred in denying their motion for partial summary judgment =
and in=20
granting Bayview Association=E2=80=99s and the Individual =
Appellees=E2=80=99=20
summary-judgment motions.
A. Standard=20
of Review and Burdens of Proof
<=
/SPAN>A party seeking to enforce a deed =
restriction has=20
the burden of proof at trial to show that the restrictions are =
valid and=20
enforceable. City of Pasadena v. Gennedy, 125 S.W.3d 687, =
695 (Tex.=20
App.=E2=80=94Houston [1st Dist.] 2003, pet. denied).
<=
/SPAN>A=20
party moving for rule 166a(c) summary judgment must conclusively =
prove all=20
of the elements of its cause of action or defense as a matter of =
law.=20
Tex. R. Civ. P. =
166a(c);=20
Holy Cross Church of God in Christ v. Wolf, 44 S.W.3d 562, =
566=20
(Tex. 2001); Rhone-Poulenc, Inc. v. Steel, 997 S.W.2d 217, =
222=E2=80=9323=20
(Tex. 1999).
<=
/SPAN>When=20
a summary-judgment order does not specify or state the grounds on =
which=20
the trial court relied, on appeal, the=20
non-movant must negate any grounds on which the trial court could =
have=20
relied, and a reviewing court will=20
affirm the summary-judgment order if any of the grounds presented =
is=20
meritorious. See Harwell v. State Farm Mut. Auto Ins. Co., =
896=20
S.W.2d 170, 173 (Tex. 1995); Mellon Serv. Co. v. Touche Ross =
&=20
Co., 17 S.W.3d 432, 435 (Tex. App.=E2=80=94Houston [1st Dist.] =
2000, no pet.).=20
In other words, a non-movant is required to show that each ground =
alleged=20
in the movant=E2=80=99s motion for summary judgment was =
insufficient to support=20
the trial court=E2=80=99s ruling. Star-Telegram, Inc. v. =
Doe, 915 S.W.2d=20
471, 473 (Tex. 1995).
<=
/SPAN>In an appeal from a summary judgment, =
our scope of=20
review is limited. See Science Spectrum, Inc. v. =
Martinez,=20
941 S.W.2d 910, 912 (Tex. =
1997). The=20
movant=E2=80=99s summary-judgment motion =E2=80=9Cmust itself =
expressly present the=20
grounds upon which it is made, and must stand or fall on these =
grounds=20
alone.=E2=80=9D Id. Issues that were not expressly =
presented to the trial=20
court by the written motion for summary judgment cannot be =
considered by=20
an appellate court as grounds for affirmance of a summary-judgment =
motion=20
that was granted. See=20
Tex. R. Civ. =
P.=20
166a(c); Science Spectrum, Inc., 941 S.W.2d at 912.
&nbs=
p;When=20
both sides move for summary judgment, and the trial court grants =
one=20
motion and denies the other, a reviewing court should ordinarily =
review=20
the parties=E2=80=99 summary-judgment evidence, determine all =
questions presented,=20
and render the judgment that the trial court should =
have=20
rendered. See FM Props. Operating Co. v. City of Austin, 22 =
S.W.3d=20
868, 872 (Tex. 2000). =E2=80=9CHowever, before a court of appeals may =
reverse=20
summary judgment for one party and render judgment for the other =
party,=20
both parties must ordinarily have sought final judgment relief in =
their=20
cross motions for summary judgment.=E2=80=9D CU Lloyd=E2=80=99s =
of Tex. v. Feldman,=20
977 S.W.2d 568, 569 (Tex. 1998). Nonetheless, when the relief =
sought is a=20
declaratory judgment, an appellate court may properly render =
judgment on=20
liability alone. Id.
<=
/SPAN>The=20
propriety of summary judgment is a=20
question of law, and we thus review the trial court=E2=80=99s =
ruling de=20
novo. Provident Life & Accident Ins. Co. v. Knott, =
128=20
S.W.3d 211, 215 (Tex. 2003).
B. Propriety of Rendition of Summary =
Judgment for=20
Appellees
<=
/SPAN>1. Chapter 204 of the Texas Property=20
Code
<=
/SPAN>In their first issue, the =
Gillebaards=20
argue that appellees did not comply with chapter 204 of the Texas =
Property=20
Code for adopting the Amended and Restated Restrictions =
and,=20
alternatively, that the Amended and =
Restated=20
Restrictions did not apply to =
the=20
Gillebaards=E2=80=99 property because they=20
had opted out under chapter 201 of the Texas Property=20
Code.
<=
/SPAN>The=20
Amended and Restated Restrictions sought to amend the 1999 express =
deed=20
restrictions in two ways: first, to add provisions for the purpose =
of=20
creating and operating a property owners=E2=80=99 association =
(Bayview=20
Association) under section 204.006 of the Texas Property Code, and =
second,=20
to add to and to modify those restrictions with provisions other =
than=20
those creating and operating a property owners=E2=80=99 =
association (such as=20
adding the single-family-use restriction) under section 204.005 of =
the=20
Texas Property Code. We construe the Gillebaards=E2=80=99 argument =
under chapter=20
204 to be that appellees did not =
properly amend=20
the 1999 express deed restrictions for either of these=20
purposes.
&=
nbsp; a. Standard=20
of Review
<=
/SPAN>Our analysis requires interpreting the =
provisions=20
of Texas Property Code chapter 204. Statutory interpretation is a =
question=20
of law, and our review is thus de=20
novo. =
Knott, 128=20
S.W.3d at 215. =
Our primary goal is to ascertain and to =
effectuate=20
the Legislature=E2=80=99s intent. In re Canales, 52 S.W.3d 698, 701 (Tex. =
2001). In doing so, we begin with the =
statute=E2=80=99s plain=20
language because we assume that the Legislature tried to say what =
it meant=20
and, thus, that its words are the surest guide to its intent.=20
Fitzgerald v. Advanced Spine Fixation Sys., Inc., 996 =
S.W.2d 864,=20
865=E2=80=9366 (Tex. 1999). In ascertaining legislative intent, we =
do not confine=20
our review to isolated statutory words, phrases, or clauses, but =
we=20
instead examine the entire act. Meritor Auto., Inc. v. Ruan =
Leasing=20
Co., 44 S.W.3d 86, 90 (Tex. 2001). We may also consider, among =
other=20
things, the statute=E2=80=99s objectives and the consequences of =
the statutory=20
construction. See Tex. Gov=E2=80=99t =
Code=20
Ann.=20
=C2=A7 311.023(1)=E2=80=93(7) =
(Vernon 2005);=20
Canales, 52 S.W.3d at 702. We construe words according to =
their=20
common usage, unless they have acquired a technical or particular =
meaning.=20
See Tex. =
Gov=E2=80=99t Code=20
Ann. =C2=A7 311.011(a), (b) (Vernon 2005). =
<=
/SPAN> <=
/SPAN>b. The=20
Gillebaards=E2=80=99 Arguments
<=
/SPAN>The=20
Individual Appellees attempted=E2=80=94in the same petition and =
ostensibly acting=20
on behalf of Bayview Association=E2=80=94to modify the 1999 =
express deed=20
restrictions both to create Bayview Association and to add, among =
other=20
things, the single-family-use restriction. The Gillebaards argue, in part of their =
first=20
issue, that the procedure for amending existing deed restrictions =
under=20
sections 204.005 and 204.006 of the Texas Property Code was not =
followed=20
because the petition in which the amendment was made was not =
approved or=20
circulated by the property owners=E2=80=99 association, but, =
rather, by individual=20
property owners. That is, =
the=20
Gillebaards argue that the petition could not have been approved =
and=20
circulated by a property owner=E2=80=99s association, as required =
by section=20
204.005, that did not exist until after the petition had been =
approved and=20
circulated. Put still another way, Bayview Association could not =
approve=20
and circulate the same petition that gave it authority to act for =
the=20
subdivision=E2=80=99s homeowners.
&=
nbsp; c. Analysis=20
of the Statutes
<=
/SPAN>Section 204.006 provides:
(a)If existing restrictions applicable =
to a=20
subdivision do not provide for a property owners=E2=80=99 =
association and require=20
approval of more than 60 percent of the owners to add to or modify =
the=20
original dedicating instrument, a petition to add to or modify the =
existing restrictions for the sole purpose of creating and =
operating a=20
property owners=E2=80=99 association with mandatory =
membership, mandatory=20
regular or special assessments, and equivalent voting rights for =
each of=20
the owners in the subdivision is effective if:
(1)a petition committee has been =
formed as=20
prescribed by Section 201.005;
Tex. Prop.=20
Code Ann. =C2=A7 204.006(a) (emphasis added). =
Section 201.005, in turn, contemplates =
that a=20
petition committee of owners be the entity that gives the notice =
required=20
to make the addition or modification that section 204.006 =
authorizes.=20
Id. =C2=A7 201.005(a); see id. =
=C2=A7 201.003(7)=20
(Vernon 2007) (=E2=80=9C=E2=80=98Petition committee=E2=80=99 or =
=E2=80=98committee=E2=80=99 means a group of three=20
or more owners who file with the county clerk a notice as required =
by=20
Section 201.005(a) and who prepare and circulate a petition as =
allowed=20
under this chapter.=E2=80=9D).
<=
/SPAN>In=20
contrast, section 204.005=20
provides:
A property =
owners=E2=80=99=20
association has authority to approve and circulate a petition =
relating=20
to the extension of, addition to, or modification of existing=20
restrictions.
Id. =C2=A7 204.005(a) =
(emphasis added);=20
see id. =C2=A7 204.005(b) (=E2=80=9CA petition to =
extend, add to, or modify=20
existing restrictions approved and circulated by a property =
owners=E2=80=99=20
association is effective if =
. . . .=E2=80=9D). Likewise, section 204.008 provides that =
=E2=80=9C[a]n=20
extension, addition to, or modification of restrictions =
proposed by a=20
property owners=E2=80=99 association=E2=80=9D may be adopted =
by various means.=20
Id. =C2=A7 204.008 (Vernon 2007) (emphasis=20
added).
<=
/SPAN>The=20
plain language of these sections reflects a due order of action to =
invoke=20
chapter 204: the existing deed restrictions must first be amended, =
by one=20
petition, to create a property owners=E2=80=99 association and to =
establish how it=20
will operate, and only after the restrictions are amended to do so =
may=20
that association then propose, approve, and circulate a new =
petition for=20
the purpose of extending, adding to, or modifying the deed =
restrictions in=20
other ways. The plain meaning of the term =E2=80=9Csole,=E2=80=9D =
as used in section=20
204.006(a), is =E2=80=9Cthe only one; only.=E2=80=9D Random House Webster=E2=80=99s =
Unabridged=20
Dictionary 1815 (2nd ed. 2001); see Tex. Gov=E2=80=99t Code =
Ann.=20
=C2=A7 311.011(a) (=E2=80=9CWords and phrases shall be read =
in context and=20
construed according to the rules of grammar and common =
usage.=E2=80=9D). The=20
petition that section 204.006(a) sanctions is one that seeks to =
amend or=20
to modify existing deed restrictions for =E2=80=9Cthe sole =
purpose=E2=80=9D of=20
creating and operating a property owners=E2=80=99 =
association. Tex. Prop. Code Ann.=20
=C2=A7 204.006(a) (emphasis added); see In re Canales, =
52 S.W.3d at=20
701 (providing that if statute is =
unambiguous,=20
it should generally be given its plain meaning without resorting =
to=20
external sources for interpretation). That means=20
that the only purpose of that petition can be, ultimately, to =
create and=20
to operate a property owners=E2=80=99 association.
<=
/SPAN>This=20
reading also comports with common sense. A property =
owners=E2=80=99 association=20
cannot conduct the preliminary steps of proposing, approving, and=20
circulating a petition, as required to invoke section 204.005, if =
the deed=20
restrictions have not yet been amended to create an association =
with the=20
power to do these things on the homeowners=E2=80=99 behalf. Here, =
for example, the=20
Individual Appellees proposed, approved, and circulated the=20
petition =
that both =
created=20
Bayview Association and amended the 1999 express deed =
restrictions=20
in other ways. Assuming without deciding that Bayview=20
Association was validly created by this petition,
it was still=20
the Individual Appellees, not Bayview Association, who =
proposed,=20
approved, and circulated =
the petition=20
that amended the 1999 express deed restrictions in ways other than =
creating the association. That is, the entity seeking to amend the =
deed=20
restrictions to include the=20
single-family-use restriction could not have been Bayview Association =
because=20
that corporation had not been given the power to act for the =
subdivision=E2=80=99s=20
homeowners at the time that the preliminary steps of proposing, =
approving,=20
and circulating that amendment took place.
<=
/SPAN>Appellees=20
first respond that our interpretation renders meaningless part of =
the=20
phrase =E2=80=9Cfor the sole purpose of creating and operating a =
property owners=E2=80=99=20
association=E2=80=9D in =
section=20
204.006(a). Id.=20
=C2=A7 204.006(a). Specifically, they argue that, by its =
including the=20
phrase =E2=80=9Cand operating,=E2=80=9D the Legislature intended =
to allow the same=20
petition both to create a property owners=E2=80=99 association and =
to allow that=20
newly created association simultaneously to do whatever else =
chapter 204=20
allows such associations to do (i.e., =E2=80=9Cto =
operate=E2=80=9D). We reject this=20
interpretation because it runs contrary to the express language in =
chapter=20
204=E2=80=99s other provisions that requires the property =
owners=E2=80=99=20
association=E2=80=94that is, the entity that a =
subdivision=E2=80=99s deed restrictions=20
already recognize to act on its homeowners=E2=80=99 =
behalf=E2=80=94to propose, to approve,=20
and to circulate extensions of, additions to, or modifications the =
subdivision=E2=80=99s deed restrictions.
See id. =
=C2=A7=C2=A7 204.005(a), (b),=20
(e), 204.008. We must construe section 204.006(a)=E2=80=99s =
language in context.=20
See Meritor Auto.,=20
Inc., 44=20
S.W.3d at 90. Considering the overall scheme of =
chapter 204 and=20
the plain language of section 204.006(a) discussed above, we hold =
that the=20
phrase =E2=80=9Cfor the sole purpose of creating and operating a =
property owners=E2=80=99=20
association=E2=80=9D in section 204.006(a) means for the =
sole purpose=20
of creating the association and establishing the terms under which =
it will=20
operate, e.g., the association=E2=80=99s powers and=20
duties.
<=
/SPAN>Alternatively,=20
appellees respond that Bayview Association=E2=80=94rather than the =
Individual=20
Appellees=E2=80=94proposed, approved, and circulated the petition =
because Bayview=20
Association was incorporated before the petition notice circulated =
and=20
because that corporation=E2=80=99s board of directors had, as the =
Amended and=20
Restated Restrictions recited, =E2=80=9Capproved the contents =
of=E2=80=9D the proposed=20
amended restrictions and had =E2=80=9Cdirected that it be =
circulated for approval=20
by the owners of real property=E2=80=9D within Bayview Acres. We =
disagree. The=20
mere incorporation of Bayview Association, without more, =
did not empower it to act for the =
subdivision=E2=80=99s=20
property owners or give it the right to invoke the provisions of =
section=20
204.005. See, e.g., Tex.=20
Prop. Code Ann. =C2=A7 204.004 (Vernon 2007) =
(=E2=80=9CA property owners=E2=80=99=20
association is a designated representative of the owners of =
property in a subdivision . . . The membership of =
the=20
association consists of the owners of property within the =
subdivision.=E2=80=9D)=20
(emphasis added). Rather, =
the 1999=20
express deed restrictions first had to be amended to provide that =
that=20
corporation would function as the homeowners=E2=80=99 =
representative. See=20
id. =C2=A7 204.006 (providing method for creating =
homeowners=E2=80=99=20
association in certain circumstances). It is self-evident that no entity can =
operate as=20
the property owners=E2=80=99 association for a subdivision, so as =
to represent and=20
to bind the subdivision=E2=80=99s homeowners, unless the =
subdivision=E2=80=99s deed=20
restrictions so provide.
<=
/SPAN>3. Chapter=20
201 of the Texas Property Code
&nbs=
p;In=20
their first issue, the Gillebaards alternatively argue that =
because Texas=20
Property Code chapter 204 was not properly followed, Texas =
Property Code=20
chapter 201 automatically applied to the petition. Although their =
brief is=20
not entirely clear, the Gillebaards appear to argue both that (1) =
a=20
property owner can file an acknowledged exclusion statement =
pursuant to=20
section 201.009 to exclude the owner=E2=80=99s property from deed =
restrictions=20
modified under chapter 204 and (2) the petition was, in effect,=20
promulgated under chapter 201, and the Gillebaards opted out under =
section=20
201.009 of that chapter. See id. =C2=A7 201.009(b)(4).=20
Because we have =
already held=20
that the trial court erred in rendering summary judgment =
and=20
declaring the Amended and Restated Restrictions to be valid and=20
enforceable for other reasons, =
we need=20
not reach either of these alternative arguments based on chapter =
201.=20
<=
/SPAN>4. Propriety =
of Granting Summary Judgment for Appellees
<=
/SPAN>Appellees=20
moved for summary judgment on the ground that the Amended and =
Restated=20
Restrictions were valid and enforceable because =
appellees had=20
complied with the requirements of chapter 204 of the Texas =
Property=20
Code. However, we =
have=20
already held that those amendments =
were=20
invalid as a matter of law because the procedures of sections =
204.005 and=20
204.006(a) of the Texas Property Code were not followed. =
Because appellees did not meet their=20
summary-judgment burden, =
the trial court erred in granting their =
motions and=20
in declaring, =E2=80=9CThe Amended And Restated =
Restrictions for Bayview=20
Acres which were enacted on August 23, 2004 and approved by owners =
representing approximately 83% of property within Bayview Acres =
are valid=20
and enforceable.=E2=80=9D =
See=20
Tex. R. Civ. P. 166a(c); =
Wolf, 44 S.W.3d at 566; Rhone-Poulenc, Inc., 997 =
S.W.2d at=20
222=E2=80=9323.
C. Propriety=20
of Denial of Summary Judgment for the =
GillebaardsThe Gillebaards =
moved for=20
partial summary judgment on their declaratory-judgment cause of =
action on=20
the ground that the Amended and Restated Restrictions=20
were invalid or unenforceable in their =
entirety=20
because appellees had not complied with the requirements of =
chapter 204 of=20
the Texas Property Code and, =
alternatively, because=20
the Amended and Restated Restrictions did not apply to =
the=20
Gillebaards=E2=80=99 property because they had opted out under =
chapter 201 of the=20
Texas Property Code. Under their first issue, the Gillebaards =
challenge=20
the trial court=E2=80=99s denial of their motion for partial =
summary judgment on=20
both of these grounds.
=
In=20
their motion for partial summary judgment, the Gillebaards =
asserted=20
that the petition =
was invalid=20
because it was not approved or circulated by a property =
owners=E2=80=99=20
association, as required by section 204.005, but, rather, was =
approved and=20
circulated by individual property owners (i.e., a petition=20
committee). This is the =
same argument=20
with which we have agreed above. Accordingly, for the reasons =
stated=20
above, we hold that the trial court erred in denying the =
Gillebaards=E2=80=99=20
motion for partial summary judgment to the extent that their =
motion=20
asserted that the Amended and =
Restated=20
Restrictions were invalid or unenforceable in their =
entirety=20
because appellees had not complied with the requirements of =
sections=20
204.005 and 204.006(a) of the Texas Property =
Code. Given our =
disposition, we=20
need not reach the Gillebaards=E2=80=99 alternative =
summary-judgment ground that=20
they could have opted out of the Amended and =
Restated=20
Restrictions under chapter 201 =
of the=20
Texas Property Code.
Conclusion
<=
/SPAN>We=20
sustain the Gillebaards=E2=80=99 first issue to the extent that it =
asserts that=20
the trial court erred by granting =
appellees=E2=80=99=20
summary-judgment motions and by denying the Gillebaards=E2=80=99 =
motion for=20
partial summary judgment based on a violation of section=20
204.
We=20
reverse those portions of the judgment, including the trial =
court=E2=80=99s=20
declaration that the Amended and Restated Restrictions for Bayview =
Acres=20
are valid and enforceable. We affirm=20
those portions of the judgment that (1) dismissed without =
prejudice any=20
remaining claims of the Gillebaards surviving summary judgment and =
(2)=20
denied appellees=E2=80=99 requests for attorney=E2=80=99s fees. We =
remand the cause for=20
further proceedings. Upon remand, the trial court is instructed to =
declare=20
that the Amended and Restated Restrictions for Bayview Acres =
are invalid and unenforceable. Cf. CU =
Lloyd=E2=80=99s=20
of Tex. v. Feldman, 977 S.W.2d 568, 569 (Tex. 1998) =
(indicating that,=20
in appeal of declaratory judgment upon cross-motions for summary =
judgment,=20
one of which motions seeks only partial relief, appellate court =
may render=20
judgment on liability). We note that, upon remand, the =
Gillebaards=E2=80=99=20
tortious-interference claim, as well as their request for =
attorney=E2=80=99s fees=20
under the Declaratory Judgment Act, remain pending.
Tim Taft
JusticePanel consists of Justices Taft, =
Jennings,=20
and Alcala. =
; =
|