Bridgestone Lakes Community Improvement Association, Inc. v. Bridgestone Lakes Development Company, Inc. and Robert A. Hudson, Claudia J. Hudson and Tiffany A. Roath, Individually

Opinion

ACCEPTED 141400604-CV FOURTEENTH COURT OF APPEALS HOUSTON, TEXAS 4/28/2015 10:53:56 PM CHRISTOPHER PRINE CLERK

No. 14-14-00604-CV On Appeal to the Fourteenth Court FILED IN 14th COURT OF APPEALS Of Appeals HOUSTON, TEXAS 4/28/2015 10:53:56 PM Houston, Texas CHRISTOPHER A. PRINE Clerk

Bridgestone Lakes Community Improvement Association, Inc. Appellant

v.

Bridgestone Lakes Development Company, Inc., et al Appellees

ON APPEAL FROM CAUSE NO. 2011-53723-CV IN THE 152nd DISTRICT COURT OF HARRIS COUNTY. TEXAS

APPELLANT’S BRIEF

Michele Barber Chimene M. Susan Rice THE CHIMENE LAW FIRM M. SUSAN RICE, P.C. TBN 04207500 TBN 10393380 15203 Newfield Bridge Ln. 39340 IH-10 West, Ste. D Sugar Land, TX. 77498 Boerne, TX. 78006 PH: (713) 474-5538; No fax PH: (713) 823-1092 FAX: (713) 840-1597 michelec@airmail.net srice@msricelaw.com

Oral Argument Requested No. 14-14-00604

IDENTITY OF PARTIES

APPELLANT: Bridgestone Lakes Community Improvement Association, Inc. TRIAL COUNSEL FOR APPELLANT: M. Susan Rice 39340 IH-10 West, Suite D Boerne, TX. 78006

APPELLATE COUNSEL FOR APPELLANT:

M. Susan Rice 39340 IH-10 West, Suite D Boerne, TX. 78006

Michele Barber Chimene 15203 Newfield Bridge Ln. Sugar Land, TX. 77498

APPELLEES:

Robert A. Hudson Claudia J. Hudson Tiffany A. Roath Bridgestone Lakes Development Company, Inc.

TRIAL AND APPELLATE COUNSEL FOR APPELLEES:

Joseph Allen Callier Callier & Garza, LLP 4900 Woodway, Ste. 700 Houston, TX. 77056

The trial judge was the Hon. Robert Schaffer of the 152nd Judicial District Court. TABLE OF CONTENTS

Contents IDENTITY OF PARTIES.............................................................................................................................. i TABLE OF CONTENTS .............................................................................................................................. ii INDEX OF AUTHORITIES........................................................................................................................ iv STATEMENT OF THE CASE ..................................................................................................................... v STATEMENT ON ORAL ARGUMENT................................................................................................... vii ISSUES PRESENTED FOR REVIEW ...................................................................................................... vii STATEMENT OF FACTS ........................................................................................................................... 1 SUMMARY OF ARGUMENT .................................................................................................................... 5 APPELLANT’S ARGUMENTS .................................................................................................................. 6 FIRST ISSUE............................................................................................................................................ 6 The trial court commited reversable error when it granted Summary Judgment on the variable slopes of the pond's sides, as the claims concerning the variable slopes were not raised in the motion for summary judgment............................................................... 6 STANDARD OF REVIEW ...................................................................................................................... 7 ARGUMENT & AUTHORITIES ON FIRST ISSUE .............................................................................. 7 SECOND ISSUE ........................................................................................................................................ 10 The trial court's denial of a Motion for Rehearing and Motion for New Trial was an abuse of discretion because the Second Motion for Rehearing and Motion for New Trial showed that Plaintiff's claims were not patently unmeritorious and that once allowed discovery, they were able to raise fact issues on the elements of duty and causation. ......................................................................................................................... 10 STANDARD OF REVIEW .................................................................................................................... 10 ARGUMENT & AUTHORITIES ON SECOND ISSUE ..................................................................... 111 THIRD ISSUE ........................................................................................................................................ 19 The trial court’s grant of the No Evidence Summary Judgment (CR 97) was harmful error because, at the time it was granted, the Fourth Amended Petition (CR SUPP 492) was the live pleading, and Plaintiffs had raised a fact issue of the elements of duty and causation (CR SUPP2 27) attacked by Defendants’ Motion for No Evidence Summary Judgment. (CR SUPP 164). .............................. 19 STANDARD OF REVIEW .................................................................................................................... 19 ARGUMENT & AUTHORITIES ON THIRD ISSUE .......................................................................... 20

ii 1.Collateral Estoppel ........................................................................................................................... 20 2.Duty & Causation Evidence ............................................................................................................ 22 FOURTH ISSUE ........................................................................................................................................ 24 The trial court’s award of $94,990.73 in indemnity was excessive, and harmful error. ..................... 24 STANDARD OF REVIEW ........................................................................................................................ 24 ARGUMENT & AUTHORITIES ON FOURTH ISSUE ........................................................................... 25 CONCLUSION & PRAYER ...................................................................................................................... 27 CERTIFICATE OF COMPLIANCE…………………………………………………………………… 27 CERTIFICATE OF SERVICE……………………………………………………………………………28 APPENDIX

iii INDEX OF AUTHORITIES

Cases Bodin v. Tenneco Oil Co., 373 S.W. 2d 350 (Tex. App- Corpus Christ 1963, writ ref'd n.r.e.)………… 12 Champion Int’l Corp. v. Twelfth Court of Appeals, 762 S.W.2d 898 (Tex. 1988) ................................. 10 Clark v. Pruitt, 820 S.W.2d 903 (Tex. App. --Houston [1st Dist.] 1991, no writ)……………………….6, 8 Cole v. G.O. Assoc., Ltd, 847 S.W.2d 429 (Tex. App. – Fort Worth 1993, writ denied) ...................... 19,21 Desert Palm Properties, N.V. v. McFarlane, No. 01-92-00967-CV, 1994 Tex. App. LEXIS 2951 (Tex. App. – Houston [1st Dist.] Dec. 8, 1994, writ denied) .............................................................................. 9 Direct Value, LLC v. Stock Bldg Sup., 388 S.W.3d 391 (Tex. App. -- Amarillo 2012, no pet.)…………………… 15 Eckler v. Gen. Council of Assemblies of God, 784 S.W. 2d 935 (Tex. App. – San Antonio 1990, writ denied) ...................................................................................................................................................... 8 Greater Houston Transp. Co. v. Phillips, 801 S.W.2d 523 (Tex. 1990)........................................... 12,22,24 Greenberg Traurig of N.Y., P.C. v. Moody, 161 S.W.3d 56 (Tex. App. – Houston [14th Dist.] 2004, no pet.) ......................................................................................................................................................... 11 Housing Auth. of the CCC v. Massey, 878 S.W.2d 624 (Tex. App. – Corpus Christi 1994, no writ) ........ 20 Jim Walter Homes, Inc. v. Reid, 703 S.W.2d 701 (Tex. App. – Corpus Christi 1985, no writ................... 21 KCM Fin., LLC v. Bradshaw, No. 13-0199, 2015 Tex. LEXIS 220 (Tex. Mar. 6, 2015)……………… 10 McConnell v. Southside Indep. School Dist., 858 S.W.2d 337 (Tex. 1993) ................................................. 8 Mission Park Funeral Chapel, Inc. v. Gallegos, No. 04-44-00459-CV, 2001 Tex. App. LEXIS 2978 (Tex. App. -- San Antonio May 9, 2001, no pet.)…………………………………………………………23 Mobil Oil Corp. v. Ellender, 968 S.W.2d 917 (Tex. 1998) ........................................................................ 22 Nixon v. Mr. Property Management Co., 690 S.W.2d 546 (Tex. 1985) ....................................................... 6 Noell v. City of Carrollton, 431 S.W.3d 682 (Tex. App. -- Dallas 2014, pet. denied)……………………10 Reagan Nat'l Adver of Austin, Inc. v. Lakeway 620 Partners LP, No. 03-00-00719-CV, 2001 Tex. App. LEXIS 4375 (Tex. App. -- Austin June 29, 2001, pet. denied)………………………………………… 15 Trans. Ins. Co. v. Moriel, 879 S.W.2d 10 (Tex. 1994) ............................................................................... 13 Trencor, Inc. v. Cornech Mach. Co., 115 S.W.3d 145 (Tex. App. – Fort Worth 2003, pet. denied) ......... 16

Rules TEX. R. EVID. R. 803(6)…………………………………………………………………………………15 TEX. R. CIV. P. 166a(c)…………………………………………………………………………………

iv STATEMENT OF THE CASE

Trial: This case involves a subdivision’s improperly-built retention pond. On September 8, 2011, plaintiff homeowners’ association, Bridgestone Lakes Community Improvement Association filed suit for breach of fiduciary duty against the subdivision’s developer and three individuals who sat simultaneously on the homeowners’ first board and on the developer’s board. (CR 5). They also brought claims for fraud and fraudulent concealment, (CR 7), negligence, gross negligence and willful misconduct. (CR 8). In addition, Plaintiffs brought a declaratory judgment action that they did not have to indemnify Defendants for attorneys’ fees. (CR 8). The Board members brought a counterclaim for indemnity. (CR 13).

Summary Judgment: On December 21, 2012, Judge Schaffer granted interlocutory summary judgment against the Plaintiffs on claims based on the failure to construct the pond according to plans approved by the Bridgestone MUD and its engineer. (CR SUPP3 3; CR Supp2 3). Plaintiffs brought multiple motions for rehearing/motions for new trial, and Plaintiffs filed a Fourth Amended Petition claiming the pond was not built according to the plans approved by the City and County. (CR SUPP 492). On April 3, 2013, Defendants filed a Motion for No-Evidence summary judgment (CR SUPP 164), and on March 21, 2013 Defendants filed a Motion for Summary Judgment seeking indemnity (CR SUPP 32) and a Supplemental Motion for Summary Judgment. (CR SUPP 39). On March 7, 2014, Judge Schaffer dismissed Plaintiffs’ claims against the defendants based on the no evidence MSJ. (CR 97). The Judge filed Findings of Fact and Conclusions of Law on June 10, 2014. (CR 297). A bench trial was held on the award of indemnity (RR 1: 1-94; RR 2) and Final Judgment was signed on June 27, 2014. (CR 318).

v Post-Trial: Judgment was modified slightly as to the amount of the attorneys’ fees. (CR 325). Notice of Appeal was filed on July 24, 2014. (CR 336).

vi STATEMENT ON ORAL ARGUMENT

These decisions rest purely on a matter of law and Appellant believes that

oral argument is not needed. However, if it is granted to Appellees, Appellant

requests oral argument.

ISSUES PRESENTED FOR REVIEW

The trial court committed reversible error when it granted Summary Judgment

on Appellant’s claims concerning the variable slope of the pond’s sides, as the claims

concerning the variable slopes were not raised in the motion for summary judgment.

The trial court’s denial of the Second Motion for Rehearing and New Trial

was an abuse of discretion because the March 27, 2013 Request for Rehearing and

Motion for New Trial showed that Plaintiff’s claims were not patently unmeritorious

and that, once allowed discovery, they were able to raise fact issues on the elements

of duty and causation, and for the equitable reason that opponent interfered with the

discovery process making the new evidence not available earlier.

The trial court’s grant of the No Evidence Summary Judgment (CR 97) was

harmful error because, at the time it was granted, the Fourth Amended Petition (CR

SUPP 492) was the live pleading, and Plaintiffs had raised a fact issue of the

elements of duty and causation (CR SUPP2 27) attacked by Defendants’ Motion for

No Evidence Summary Judgment. (CR SUPP 164).

vii The trial court’s award of $94,990.73 in indemnity was excessive, and

harmful error, because: (1) some of the fees were for labor that was purely

unnecessary; (2) a multiplier of 0.5 times the total fees should have been applied

rather than 0.75 because the three Board members who qualified for indemnity

should have been counted as one party because the work that was done for one of

them could have been used for the others without any more time being expended;

and (3) in some matters the Board members were not the prevailing party so as to

qualify for indemnity of the associated fees.

viii No. 14-14-00604-CV On Appeal to the Fourteenth Court Of Appeals Houston, Texas

Bridgestone Lakes Community Improvement Association, Inc. Appellant

ON APPEAL FROM CAUSE NO. 2011-53723-CV IN THE 152nd DISTRICT COURT OF HARRIS COUNTY. TEXAS

TO THE HONORABLE COURT OF APPEALS:

COMES NOW, APPELLANT, (hereinafter “the homeowners’ association”),

and presents this, its Appellant’s Brief.

STATEMENT OF FACTS

Bridgestone Lakes Community Improvement Association, Inc. (“the

homeowners”) is a non-profit corporation composed of persons who reside and own

homes in the Bridgestone Lakes Subdivision, a small subdivision in the northern part of Harris County, Texas. (CR SUPP2 4). Bridgestone Lakes Development

Company, Inc. (‘the developer”) is the developer of the subdivision who built the

homes around a retention pond in a manner that violated good practices for building

such ponds. (CR SUPP2 4). The homeowners complaint was not just that such poor

building caused added erosion of the sides of the pond. The homeowners’ prime

complaint was these bad practices caused astronomical repair costs, which the

homeowners could not afford.1 They also complained that the early Board Members,

who also served on the Board of the Developer, fraudulently withheld information

about the settlement between the Developer and the Homeowners’ Association,

requiring that the new (homeowner) Board Members ratify the Agreement which

was unfair and very costly to the Homeowners’ Association – not just committing

fraud but also breaches of their fiduciary duty and willful acts. (CR SUPP 2 3-10;

CR SUPP 492-515). The flaws in the pond include: (1) the failure to put in a

maintenance berm, so that repairs could be done to the pond with heavy equipment,

rather than by hand; (2) fencing off of the pond, again requiring hand rather than

1 Excerpt from the deposition of Mr. Conner: Q: “…now we’re not saying that Mr. Hudson had anything to do with the nutria (a burrowing animal) but…did it cost more money to treat the nutria because there was a sidewalk there, fencing and a lack of a berm. A: “Yes, I would say that it did. The means of treatment, rather than being more mechanical, in other words being able to go in with earth equipment…and excavate the caves and then recompact…the only thing that could go in in a cost effective manner was a urethane injection system which we could carry down the sidewalk.” (CR Supp1 : 61) 2 machine repairs; (3) putting a sidewalk and fence immediately adjacent to the pond,

thus increasing the slope angle on the pond; and (4) creating an inconsistent angle

of the pond slope, from 2:1 to 3:1, resulting in inconsistent and increased erosion.

(CR SUPP 2 3-10; CR SUPP 492-515).

Robert A. Hudson, Claudia J. Hudson and Tiffany A. Roath were individuals

who were on the Homeowners’ Association Board and were simultaneously on the

board of the Developer. (CR SUPP2 3-10; CR SUPP 7). This Board of Directors of

the homeowners signed a settlement agreement concerning the detention pond

during the tenure of the Hudsons and Ms. Roath. (CR Supp 74; CR SUPP 513). The

settlement agreement admitted that, “the Developer constructed the Section 1

Detention Facilities in a manner that varies from the Approved Plans, and,

“Stormwater Solutions has advised the parties that the variations from the Approved

Plans will result in increased cost of Maintenance Work and an increased likelihood

of requiring Major Maintenance Work.” (CR Supp1 : 74). In return for a $25,000

deposit by the Developer (which was a small amount of the actual costs)(CR SUPP

633-34), the homeowners, led by Mr. Hudson, agreed not to hold the developer

responsible and agreed to have the Homeowners’ Association take over the repair

costs of the pond. (CR SUPP 506). The original Board kept quiet about their

agreement with the Developer, and had the oncoming Board (i.e. Plaintiffs) accept

all of their decisions, without knowing the existence of and ramifications of this

3 Agreement. (CR SUPP2 19). The new board was asked to, and did, sign an

agreement that made all of the old board’s actions final – without knowing what

these actions were. (CR SUPP2 6). When the new board found that the old board

knew that the pond was built incorrectly and that the old board had agreed to accept

sky-high maintenance costs, this lawsuit came about. (CR SUPP 526).

The Court awarded summary judgment to defendants on all of the

homeowners’ claims on December 21, 2012. (CR SUPP 3 3). Then, the Court

awarded summary judgment on the No Evidence Motion for Summary Judgment

(Fourth Amendment Petition) on March 7, 2014. (CR 97). A bench trial was had

on the old board members’ counterclaim for indemnity. (RR1; RR2). The Articles

of Incorporation for Bridgestone Lakes Community Improvement Association, Inc.

provide for indemnification of board members “except in relation to matters as to

which he shall be judged in such action, suit, or proceedings to be liable for gross

negligence or willful misconduct in the performance of duty. BYLAWS OF

BRIDGESTONE LAKES COMMUNITY IMPROVEMENT ASS’N, INC., art. XI, § 5. (RR2, Ex.

1). Segregation of fees was the major issue of the bench trial. Because the interest

of the old board members were identical, the homeowners’ argued that the actual

fees should be split 50:50, with indemnity for only 50% of the total fees generated.

(The developer was not eligible for indemnity.) The defendants argued that 75% of

4 the total fees should be indemnified. (RR 1). The Court awarded 75% of the total

fees as indemnification. (CR 325).

SUMMARY OF ARGUMENT

Summary judgment is not proper on any claim not explicitly raised in the

Motion for Summary Judgment. Defendants’ First Motion for Summary Judgment

only addressed the absence of duty and causation in regard to the homeowners’

claims that the absence of a berm caused damages and the sidewalk in the slope area

caused damages. It did not address, at all, the homeowners’ claims that the varying

slopes of the pond caused damages. The homeowners were not required to raise a

fact issue on causation or duty on this claim until it was raised in the motion for

summary judgment. This affects summary judgment on all causes of action.

Granting a summary judgment on causes of action not addressed in the motion is

reversible error.

It should be reversible error not to grant a new trial where new evidence shows

that there were fact issues on all contested elements and the opponent’s interference

with the discovery process is the reason the new evidence was not formerly

available. The Second Motion for New Trial/ Motion for Rehearing established that

there was evidence of duty and causation on all causes of action and only because

the attorney for BMUD had “silenced” a material witness had the Plaintiffs not been

able to bring this evidence forward in a timely manner. 5 Collateral estoppel did not apply to the Motion for No Evidence Summary

Judgment and Supplemental Motion for Summary Judgment. A different allegation

was at issue: that the Developer did not build the Detention Pond according to the

Plans submitted to the City and County. Additionally, this had not been fully and

fairly litigated earlier in the litigation. Evidence presented by Plaintiff raised a fact

issue on duty and causation for each cause of action so summary judgment on the

Fourth Amended Original Petition was reversible error.

Finally, the attorneys’ fees awarded for indemnity were excessive. Only the

individual Defendants were entitled to indemnity under the Bylaws, and Plaintiffs

argued that the legal fees incurred should have been multiplied by a multiplier of 0.5

rather than 0.75 because the work done for the individuals was identical, making it

half of total work done. Additionally, some of the work done, like preparation of a

jury charge when Defendants knew this was not a jury trial, was not reasonable and

necessary, and some amounts of time spent were excessive.

APPELLANT’S ARGUMENTS

FIRST ISSUE The trial court committed reversible error when it granted summary Judgment on Appellant’s claims concerning the variable slope of the pond’s sides, as the claims concerning the variable slopes were not raised in the motion for summary judgment.

6 STANDARD OF REVIEW

The Supreme Court has mandated the following standards for reviewing a

motion for summary judgment:

1) The movant for summary judgment has the burden of showing that there is no genuine issue of material fact and that it is entitled to judgment as a matter of law. 2) In deciding whether there is a disputed material fact issue precluding summary judgment, evidence favorable to the non-movant will be taken as true; and 3) Every reasonable inference must be indulged in favor of the nonmovant and any doubts resolved in its favor.

Nixon v. Mr. Property Management Co., 690 S.W.2d 546, 548-49 (Tex. 1985); see

also, Clark v. Pruitt, 820 S.W.2d 903, 905-06 (Tex. App. – Houston [1st Dist.]

1991, no writ).

ARGUMENT & AUTHORITIES ON FIRST ISSUE

Appellees’ first motion for summary judgment attacked Appellant’s claims

that it was wrongful to fail to put in a thirty-foot maintenance berm and a sidewalk

that increased erosion in the pond. (CR SUPP1 8). In relation to the breach of

fiduciary duty cause of action, Appellees attacked Appellant’s claims that “…the

Defendants failed to build a thirty (30) foot maintenance berm, then they put in a

sidewalk, which created more of a slope angle on the pond, which in turn increased

the rate of erosion.” (CR SUPP1 9). No mention of Appellant’s claim that anything

to do with the variable slopes of the pond sides could be a breach of fiduciary duty-

7 or not a breach of fiduciary duty. With respect to the fraud action, Appellees

attacked Appellant’s claims that the old board did not reveal “the fact that they failed

to put in a thirty (30) foot maintenance berm and they put in a sidewalk that increased

erosion in the pond.” (CRSUPP1 10). No mention that failure to tell the new board

about the variable slopes did – or did not – make a tenable fraud claim. With respect

to Appellant’s negligence, gross negligence and willful misconduct claims, again,

Appellees attack only “Plaintiff[’s] claims ‘that the Defendants’ failure to build a

thirty (30) foot maintenance berm and their decision to build a sidewalk that

increased erosion…[was wrongful]” (CR SUPP 10). They make no mention of the

variable slopes of the pond. On the next page of the motion, Appellees continue,

“As this Court knows, the existence of duty and causation of damages (due to the

breach of such duty) are questions of law for a trial court to determine from facts

surrounding the occurrence in question, which in this case is the purported duty to

construct a thirty (30) foot maintenance berm and the presence of a sidewalk on

side slope causing erosion. (CR SUPP 11, #12). On page CR SUPP 12, again they

mention only the thirty (30) foot berm. (CR SUPP1 12, #13). On page CR SUPP1

15, again the Appellees mention that “the presence of a sidewalk on the side slope

did not cause any damages repaired by Storm Water Solutions.” (CR SUPP1 15,

#15). No mention of the variable slopes claimed by Appellant is made.

8 A summary judgment motion must define the issues and put the non-moving

party on notice with adequate information to oppose the motion. Eckler v. Gen.

Council of Assemblies of God, 784 S.W. 2d 935, 937 (Tex. App. – San Antonio 1990,

writ denied). How is a non-movant going to have adequate information to oppose

an effort to eliminate their claims concerning the variable slopes, if all the movant

talks about is a thirty-foot berm and a sidewalk? The movant cannot hide the

grounds of attack under a bushel barrel of totally different attacks. The duty and

causation related to the uneven slopes would have been proven to exist by the

Detention Pond Maintenance Agreement executed while Defendants were still on

the Board, (this was done so that BMUD would “approve” the pond and accept

ownership of the pond, CR SUPP 2 7). But there was no reason to raise it because

Defendants had not attacked the duty and causation of the 2:1 to 3:1 slopes. An

appellate court cannot read between the lines, infer or glean from the pleadings or

the proof any grounds for granting summary judgment other than those grounds

expressly set forth before the trial court. McConnell v. Southside Indep. School Dist.,

858 S.W.2d 337, 343 (Tex. 1993). Summary judgment cannot be granted on the

claims about differing slopes.

An example where a movant failed to address all claims and was denied total

summary judgment occurred in Clark v. Pruitt, 820 S.W.2d 903 (Tex. App. –

Houston [1st Dist.] 1991, no writ). Clark’s pleadings had raised estoppel as a

9 counter-affirmative defense to a limitations defense, and Pruitt did not address

estoppel in his affidavit or his brief. Id. The appellate court reversed the summary

judgment. Granting a summary judgment on causes of action not addressed in the

motion is reversible error. Desert Palm Properties, N.V. v. McFarlane, No. 01-92-

00967-CV, 1994 Tex. App. LEXIS 2951 (Tex. App. – Houston [1st Dist.] Dec. 8,

1994, writ denied). The first summary judgment should be reversed.

SECOND ISSUE

The trial court’s denial of the Second Motion for Rehearing and New Trial was an abuse of discretion because the March 27, 2013 Request for Rehearing and Motion for New Trial showed that Plaintiff’s claims were not patently unmeritorious and that, once allowed discovery, they were able to raise fact issues on the elements of duty and causation.

STANDARD OF REVIEW

The summary judgment standard would apply to a Motion for Rehearing.

Abuse of discretion is the correct standard to apply to a motion for new trial. A trial

court has wide discretion in granting a new trial, and the trial court’s discretion will

not be disturbed on appeal absent a showing of manifest abuse of discretion.

Champion Int’l Corp. v. Twelfth Court of Appeals, 762 S.W.2d 898, 899 (Tex. 1988).

10 ARGUMENT & AUTHORITIES ON SECOND ISSUE

Regarding the Motion for Summary Judgment entered December 21, 2012,

(CR SUPP 3 3), Plaintiff filed two Motions for Rehearing and Motions for New

Trial. This appellate issue pertains to the Second Motion for Rehearing and Motion

for New Trial, filed on March 27, 2013, (CR SUPP 41) and the Supplement filed the

next day. (CR SUPP 97).

The first cause of action in which duty has been brought into question by the

Motion for Summary Judgment was breach of fiduciary duty. Summary judgment

was granted based on the Defendants having negated the existence of a fiduciary

duty that could be breached. The Third Amended Original Petition alleged that all

three defendants were members of the Homeowners’ Association Board and the

Detention Pond Maintenance Agreement (CR SUPP 74) showed Robert Hudson to

have been president of this Board. (CR SUPP 85-86). A fiduciary relationship is not

limited to cases where legal relations create a fiduciary duty as a matter of law,

although Plaintiff would argue that this is such a case. A fiduciary relationship exists

in all cases in which influence has been acquired and abused, in which confidence

has been reposed and betrayed and the origin of the confidence is immaterial. Noell

v. City of Carrollton, 431 S.W. 3d 682 (Tex. App. – Dallas 2014, pet. denied). Here,

the homeowners trusted the Board to look out for their interests vis-à-vis the

11 Developer and the “outside world”. This was sufficient to bring about a fiduciary

duty or duty of utmost good faith and fair dealing. KCM Fin. LLC v. Bradshaw, No.

13-0199, 2015 Tex. LEXIS 220 (Tex. Mar. 6, 2015). Moreover, self-dealing would

be a breach. All individuals were also employed by the Developer. Had they

decided to fix the pond according to Storm Water Solutions recommendations, the

cost - $126,716 (CR SUPP 96) – would have been born mostly by the developer. By

waiting and not fixing the pond, the cost would be born by the homeowners. (CR

SUPP 54, 57). This is at least some evidence of causation of damages. This shows

the breach of fiduciary duty claim not to have been a patently unmeritorious claim –

the only kind summary judgment is supposed to eliminate.

The next claim brought by the Plaintiff is fraud. Fraud is not only committed

by a knowing misrepresentation; it is also committed by failure to make a

representation when one has a duty to do so. Greenberg Traurig of N.Y., P.C. v.

Moody, 161 S.W.3d 56 (Tex. App. – Houston [14th Dist.] 2004, no pet.). One has a

duty to disclose a material fact when there is a confidential (i.e. fiduciary)

relationship. Id. The signature on the Detention Pond Maintenance Agreement

shows Robert Hudson to be the president of the Homeowners’ Board. (CR SUPP

85-86). The summary judgment did not show Roath and Claudia Hudson not to be

as the Plaintiff alleged, i.e. they were members of the Homeowners’ Association

Board, too. (CR SUPP2 6). The Maintenance Agreement showed that there was a

12 material fact to be told: the pond was not constructed as per plans (CR SUPP 52,

74) and it would cost more to maintain or fix. (CR SUPP 74). The affidavit of Ms.

Wilkinson testified that they were not told, despite the fact that they had a

responsibility, as discussed above, for utmost goof faith and fair dealing. (CR SUPP

57, 90, 96). Therefore they had a duty to tell the oncoming board this material fact,

so they could either take care of it or sue the developer – theirs was a fiduciary

relationship which gave rise to a duty to “tell” and they didn’t. The summary

judgment did not show that there was no duty to tell which was breached. Likewise,

for the same reasons, the summary judgment did not discount the causation of the

damages. (CR SUPP 54, 58, 61, 63, 77).

The next cause of action which the summary judgment had attacked was

negligence/gross negligence/willful conduct. In determining whether the defendant

was under a duty, the court will consider several interrelated factors, including the

risk, the foreseeability and the likelihood of injury weighed against the social utility

of the actor’s conduct, the magnitude of the burden of guarding against the injury,

and the consequences of placing the burden on the defendant…of all these factors,

foreseeability of the risk is “the foremost and dominant consideration. Greater

Houston Transp. Co. v. Phillips, 801 S.W.2d 523, 525 (Tex. 1990). Even a volunteer

owes a duty to act non-negligently. Bodin v. Tenneco Oil Co., 373 S.W.2d 350 (Tex.

App – Corpus Christi 1963, writ ref’d n.r.e.). When the cost to fix the pond became

13 known, (CR SUPP 96), and the cause of the problem became known, (CR SUPP 54),

and the fact that repairs would cost more if the pond were left as it was, (CR SUPP

54, 57, 61), it was foreseeable that the costs of leaving it as it was would bury a small

homeowners’ association in costs and the ordinary prudent person would pay the

costs to completely fix the pond at a time when the Developer was still on the Board

and the Developer would have to pay most of the costs. Given the foreseeability,

particularly, there was a duty to act non-negligently. The evidence of causation is

as listed for the other causes of action. Summary judgment should not have been

granted on the negligence cause of action.

Gross negligence, to be the ground for exemplary damages, should be the

entire want to care which would raise the belief that the act or omission complained

of was the result of a conscious indifference to the right or welfare of the persons

affected by it. Trans. Ins. Co. v. Moriel, 879 S.W.2d 10 (Tex. 1994). Given the

actual knowledge that Defendants had, (CR SUPP 54, 58), and the large risk

($126,716 for a small homeowners’ association – or any homeowners’ association

(CR SUPP 96), and the lack of positive social utility of leaving it unfixed, and the

minor imposition on a developer who has been a developer for many years –

indicating substantial wealth – Defendants had a duty to not be grossly negligent.

Factors that showed causation are the same as for the other torts. Summary judgment

should not have been entered on gross negligence.

14 Lastly, Jones and Carter and Storm Water Solutions confirmed that the pond

wasn’t “right” and Defendant was made aware of the problem of huge costs. (CR

SUPP 53-54, 58, 77, 90 and told how to fix it. (CR SUPP 96). Defendants failure

to fix the pond was nothing short of willful misconduct. The same factors that

generate a duty for gross negligence do so also for willful conduct. The same factors

that show causation for the other torts do so for willful conduct. Summary judgment

should not have been granted on willful conduct.

Defendants point to various pieces of evidence counter to Plaintiff’s evidence.

However, all this establishes is that there are fact issues on some points. Conner

testified that the developer constructed the pond in a manner not according to his

own plans. (CR SUPP 52). Then he testified that he couldn’t know if the

Bridgestone MUD engineers would have looked at the plans. (CR SUPP 103).

Conner currently does water utility operations, (CR SUPP 51) and Defendant

developer could be a possible client in the future. A summary judgment may be

based on the testimonial evidence of an interested witness is it is uncontroverted, or

on the expert testimony of an interested witness if the evidence is clear, positive,

direct, otherwise credible and free from contradictions and inconsistencies and could

be readily controverted. TEX. R. CIV. P. 166a(c). The testimony about whether

BMUD ever approved the plans is testimonial evidence. It is not uncontroverted,

however: first Conner says he knows, then he says he doesn’t know. (CR SUPP

15 103). This does not undermine Plaintiff’s causes of action. If evidence requires the

Court to assess credibility or resolve which time the witness was telling the truth, it

is not proper for summary judgment. Reagan Nat’l Adver. of Austin, Inc. v. Lakeway

620 Partners LP, No. 03-00-00719-CV, 2001 Texas App. LEXIS 4375 (Tex. App.

– Austin June 29, 2001, pet. denied). Additionally, the Detention Pond Maintenance

Agreement said the developers varied from the approved plans and say that these

plans were approved by the District, BMUD. (CR SUPP 74, 76). This does not

negate any causes of action.

Defendant complains that evidence is heresay, but they did not get a ruling on

their hearsay objection. A party seeking to exclude evidence must obtain a written

ruling on the objection. Stovall & Assoc. v. Hibbs Fin Ctr., Ltd., 409 S.W.3d 790,

797 (Tex. App. – Dallas 2013, no pet.). Defendants did not do so for any of the

alleged “hearsay.” (CR SUPP 50, et seq.) Moreover, business records that have

become another entity’s primary record of the underlying transaction may be

admissible pursuant to TEX. R. EVID. R. 803 (6). Therefore, the estimate of costs

to do remedial work on the pond, done by Storm Water Solutions, an engineering

and water utility company, (CR. SUPP. 69), became the admissible business records

to show causation of the inaccuracies in making the pond. (CR. SUPP. 96).

Likewise, an email and its attachments are admissible as admissions of a party

opponent. Direct Value, L.L.C. v. Stock Bldg. Sup., 388 S.W.3d, 391 n.5 (Tex. App.

16 – Amarillo 2012, no pet.). A statement by a party’s agent or servant concerning the

matter within the scope of his agency or employment may be offered as an admission

of the party itself. Trencor, Inc. v. Cornech Mach. Co., 115 S.W.3d 145, 151 (Tex.

App. – Fort Worth 2003, pet. denied). Therefore, the email from an engineer

(Glessinger) at Storm Water Solutions while in the Defendants employ, that said

repairs would be more expensive because of the design, provides some evidence of

causation. (CR SUPP 90, 63). Exact cost estimates (CR SUPP 54, 57, 61, 77, 95-

96) raise a fact issue against settlement boilerplate that says,” The cost of

maintenance work is uncertain and difficult to ascertain.” Causation and damages

are for the trier of fact to determine.

Finally, Defendants claimed that Conner was not an engineer and was unfit to

give expert testimony. While Conner did testify that he did not know as much as an

engineer, he was manager for Bridgestone MUD and currently does water utility

operations. (CR SUPP 50-51). One would expect him to be familiar with costs,

pond maintenance, and proper construction of ponds. So he is qualified as an expert

in those areas. However, this is not an area of expertise for expert testimony. The

logic is simple: Draw a one inch horizontal line. Draw a second one about an inch

away. Draw two lines, at right angles, each starting at the right end of the one inch

line. Make the first one two inches and the second one three inches. Now connect

the open sides to form a hypotenuse for each triangle. The hypotenuse is the slope

17 of the pond wall. Any person of average eyesight can tell that the “three inch”

triangle is steeper than the “two inch triangle” (slopes vary around the pond) and can

tell whether the slope is nearer to a 3:1 slope or a 2:1 slope. Conner’s testimony did

not need to be expert testimony. Simply by watching the areas with different slopes,

he couldn’t give a mathematical rate of ccx3/per hour but – he visited the pond at

least once a week (CR SUPP 50) – he could see which one was eroding faster.

Finally, testimony that Hudson was made aware of the problem with the side

slopes and the increased costs is not hearsay, because it would have been Conner

telling him. At deposition, he was available for questioning.

Even this prime witness had not been deposed at the time summary judgment

was filed. Rarely is summary judgment allowed when most of the discovery has not

commenced. Ms. Rice’s Affidavit explained the need for Mr. Conner’s testimony,

Tenneco Inc. v. Enterprise Prods., 925 S.W.2d 640, 647 (Tex. 1996)(a party who

contends that it has not had time for discovery must file either an affidavit explaining

the need for further discovery…). She explained that the attorney for BMUD

actively interfered with her getting any testimony from Mr. Conner, the prime

witness in the case. (CR SUPP 23-24). Interference with the discovery process is a

serious matter. Judges have broad discretion whether to grant a new trial but they

do not have the discretion to allow discovery interference to change the result of a

case that, when the evidence comes in (as soon as possible after decision) makes it

18 painfully obvious that there are multiple fact issues that would preclude summary

judgment. A motion for New Trial is an equitable proceeding. Such a result is

inequitable and raises issues of judicial inefficiency for results that are likely to be

overturned on appeal. Counsel did not find case authority saying that it is an abuse

of discretion to deny a Motion for New Trial where: (1) discovery was interfered

with by the other side and (2) once discovery was obtained, it showed there were

fact issues on all the elements in contention in the motion for summary judgment.

However, this would be a narrow ruling, applicable only where there has been

discovery interference, and it would follow guiding rules and principles to do equity

and conserve judicial economy. For these reasons, the second denial of a Motion

for New Trial and Rehearing should be reversed, as should the First Motion for

Summary Judgment.

THIRD ISSUE

The trial court’s grant of the No Evidence Summary Judgment (CR 97) was harmful error because, at the time it was granted, the Fourth Amended Petition (CR SUPP 492) was the live pleading, and Plaintiffs had raised a fact issue of the elements of duty and causation (CR SUPP2 27) attacked by Defendants’ Motion for No Evidence Summary Judgment. (CR SUPP 164).

Once a no-evidence motion for summary judgment is filed, the burden shifts

to the non-moving party to present evidence raising an issue of material fact as to 19 the elements (duty and causation) specified in the motion. The evidence presented

by the motion and response is reviewed in the light most favorable to the party

against whom the summary judgment was rendered, crediting evidence favorable to

that party if reasonable jurors could and disregarding contrary evidence unless

reasonable jurors could not. Mack Trucks, Inc. v. Tamez, 206 S.W.3d 572, 581-82

(Tex. 2006).

ARGUMENT & AUTHORITIES ON THIRD ISSUE

1. Collateral Estoppel The Fourth Amended Original Petition changed the previous pleadings by

claiming that the Defendants erred by building the pond counter to the plans

approved by the City of Houston and Harris County.

Defendants in their No Evidence Motion for Summary Judgment claimed that

collateral estoppel applied to bar Plaintiff’s claims. The essential elements of

collateral estoppel are: the facts sought to be litigated in the second action were fully

and fairly litigated in the prior action; those facts were essential to the judgment in

the first action, and the parties were cast as adversaries in the first action. Cole v.

G.O. Assoc., Ltd, 847 S.W.2d 429 (Tex. App. – Fort Worth 1993, writ denied). To

make a determination whether the facts in a case were litigated, the court considers

the following facts: whether the parties were fully heard, whether the court supported

its decision with reasoned opinion, and whether the decision was subject to appeal

20 or was in fact reviewed on appeal. Id. An ultimate issue essential to the judgment

does not refer to a claim or cause of action, but to factual determinations submitted

to the jury that are necessary to form a basis of judgment. Housing Auth. of the CCC

v. Massey, 878 S.W.2d 624, 627 (Tex. App. – Corpus Christi 1994, no writ).

The ultimate issue in the Fourth Amended Petition is that “Developer failed

to build the Section 1 Detention Pond as per the plans that the Developer submitted

to the City and County in 2001 and resubmitted in 2008 and the Defendants failed

to reveal this to the new board members. (CR SUPP 497). This is a different fact

than having failed to build the pond to the plans submitted to BMUD. Therefore

collateral estoppel doesn’t apply.

Also, the facts in a case were not fully and fairly litigated. Mr. Conner testified

that he didn’t know if the plans were submitted to BMUD, but they were to the City.

(CR SUPP 52). Other than that, there was no mention of plans submitted to the City

and there has been no appeal until now. Collateral estoppel does not apply.

Comparison with the plans possibly approved by BMUD, (CR SUPP 74), the

plans approved by the City did require a 3:1 slope, no sidewalk or fences. “The 2001

and 2008 Plans that the Developer submitted to the City and County indicate that

there is a 3 to 1 slope around the pond…and the sidewalk and fence were not in the

plans that the Developer submitted to the City and County in 2001 and 2008…before

the Section 1 Pond was completed the Defendant, Robert Hudson was made aware

21 of the problem with the side slopes, fences and sidewalks, but he failed to correct

the problems. All of the Defendants failed to insure that the pond was built properly

and their decisions regarded the pond protected the interests of the Developer and

benefitted the Developer financially.” (CR SUPP 498).

2. Duty & Causation Evidence

Because the discrepancy between the BMUD Plans and reality, and the

discrepancy between the Houston/Harris County Plans and reality were the same,

the Court is directed to take judicial notice of the exhibits against summary judgment

that were presented with the Second Motion for Rehearing. (CR SUPP 50, et seq.)

These also function as exhibits against summary judgment on the Fourth Amended

Petition. A builder owes a duty of ordinary care in the building of its product in a

good and workmanlike manner. Jim Walter Homes, Inc. v. Reid, 703 S.W.2d 701

(Tex. App. – Corpus Christi 1985, no writ). To determine whether one has a duty

not to be grossly negligent, one looks at several interrelated factors, including the

risk, the foreseeability and the likelihood of injury weighed against the social utility

of the actor’s conduct, the magnitude of the burden of guarding against the injury,

and the consequences of placing the burden on the defendant…of all these factors,

foreseeability of the risk is “the foremost and dominant consideration. Greater

Houston Transp. Co., 801 S.W.2d at 525. Gross negligence includes two elements:

(1) viewed objectively from the actor’s standpoint, the act or omission must involve

22 an extreme degree of risk, considering the probability and magnitude of the potential

harm to others, and (2) the actor must have actual, subjective awareness of the risk

involved, but nevertheless proceed in conscious indifference to the rights, safety or

welfare of others. Mobil Oil Corp. v. Ellender, 968 S.W.2d 917 (Tex. 1998). There

is no question that the Defendants, as Board Members knew that the Homeowners’

Association faced an extreme degree of risk - $126,716 (CR SUPP 96) if the Board

did not fix the pond. It was foreseeable that they would actually have to pay extra

money. (CR SUPP 54). Likewise, the Board proceeded with conscious

indifference not to make the repairs but to enter into an agreement where the

homeowners would be required to make the repairs. (CR SUPP 60). The Plaintiff

has raised more than a scintilla of evidence on the existence of duty and causation

for gross negligence.

Likewise, the Board had a duty not to commit willful misconduct. The

just-discussed factors argue for a duty. Also, the utility of failing to correct the pond

was negative. (See, e.g. CR SUPP 61). And the burden on a developer could not

possibly be as great as it would be on sixty-some-odd homeowners. The Plaintiff

has raised more than a scintilla of evidence of duty and causation on willful conduct.

Adopted herein by reference are the references to evidence by which Plaintiff

raised more than a scintilla of an existence of duty and causation on the other causes

of action. (See, infra, pp. 10-12).

23 FOURTH ISSUE

The trial court’s award of $94,990.73 in indemnity was excessive, and harmful error.

STANDARD OF REVIEW The Fourth Issue argues that fees are excessive for several reasons: (1) First

off, no indemnity is owed at this time because Plaintiff has raised a fact issue on duty

and causation in the Third Issue and less indemnity is owed because the First Issue

eliminated one of the claims on which summary judgment was attempted. Issues

Three and Four should be sent back to the finder of fact in the trial court and, because

the indemnity agreement makes indemnity due only when it cannot be proven that

Defendants did not commit gross negligence or willful acts, indemnity is premature.

Thus, the standard of review is de novo, and award of indemnity is premature.

Second, some of the fees were for work that was purely unnecessary. The

standard of review in remittitur cases is sufficiency of the evidence. Mission Park

Funeral Chapel, Inc. v. Gallegos, No. 04-00-00459-CV, 2001 Tex. App. LEXIS

2978 (Tex. App. – San Antonio May 9, 2001, no pet.).

Third, a multiplier of 0.5 should have been applied to the total bill because all

the Board member’s interests were identical and you should only have to do the same

thing once for all three. The Developer was not entitled to indemnity. Again, the

standard of review in remittitur cases is sufficiency of the evidence. Id.

24 Finally, in some matters the Board members were not the prevailing party. I

could find no authority on this, but believe it to be a de novo review.

ARGUMENT & AUTHORITIES ON FOURTH ISSUE

A trial to the bench was had on indemnity. (RR1, RR2). Section 5 of the Bylaws provides for indemnification as follows: “The Association shall indemnify any Director, officer, or employee of the Association against expenses actually and necessarily incurred by him and any amount paid in satisfaction of judgments in connection with any action, suit or proceedings, whether civil or criminal in nature, in which he is made a party by reason of being or having been a Director, officer or employee…except in relation to matters as to which he shall be judged in such action, suit or proceeding to be liable for gross negligence or willful misconduct in the performance of duty.” (CR 27). Because Plaintiff has taken steps in this appeal to overturn the No Evidence

Summary Judgment on the issues of duty and causation for the causes of action of

gross negligence and willful misconduct, it would be premature to indemnify any of

the Defendants. (Of course, by the terms of the Bylaws, the Developer is not eligible

for this indemnity.)

If such time comes as indemnity is an issue, there are other arguments against

full indemnity. Firstly, the interests for Robert Hudson, Claudia Hudson and Tiffany

Roath were identical in this case. Plaintiff would argue that, like with jury charges

and “strikes”, identical interests should be grouped together. Therefore, half of the

total bill is reimburseable as indemnity and half is not because it is attributable to

25 work on the Developer’s behalf, an interest somewhat different from that of the

Board Members in that he may have done different acts and he is not eligible for

indemnity.

Counsel for Defendant brought up the point that the judgment will be awarded

“jointly and severally.” This is a red herring. What we are indemnifying is attorney

labor, quantified in hours, not payment of damages, as there presently are none. If

Plaintiff is successful in its challenges and goes on to full trial, indemnification of a

judgment may be an issue. But it is premature at this juncture. Therefore the

possibility of joint and several damages has nothing to do with quantifying how

much attorney labor was needed for what party.

Some of the labor expended simply wasn’t reasonable and necessary. Counsel

for Plaintiff testified to this at trial. (RR1). A total of $50,643.77 was not reasonable

and necessary. Among items that were not reasonable and necessary are everything

to do with a jury. A jury demand was made, (RR1 19-20), but no jury fee was ever

paid. Defendants knew they weren’t having a jury, but counsel went on to do 22.35

hrs (invoice 43332) on a jury charge and motion in limine. The Depositions on

Written Questions were for the benefit of the Developer (invoices 42975,

43067)(RR1 23-32), so should not be paid to the Board Members. The amount of

time on invoice 43171 for a Motion for Summary Judgment was not reasonable

because it was a simple motion with little research. (RR1 33). The Motion to Quash

26 the Conner Deposition was not necessary as Plaintiff still needed it for its rehearing

and Defendants’ Counterclaim was on file. (RR1 37)(Invoice 43348). The Motion

to Dismiss and Motion for Sanctions were not necessary. (RR1 40)(Invoice 43469,

43559, 43676). Invoice 43412 only benefitted the developer. Rule 91a attorney’s

fees are only awarded if you are successful, so they should not be awarded. (RR1

41). The total amount of fees is $120,645.69. (RR1 55). Deducting those fees that

were not reasonable and necessary is: $120,645.69 - $ 50,643.77= $70,001.92.

Then, by the apportionment formula discussed above, this should be $35.000.96 or

half of the $70K to go toward indemnification. This Court should order a remittitur,

if it orders any fees at all.

CONCLUSION & PRAYER

This was a case where the Developer and the Developer’s hand-picked board

members knew they had built a Detention Pond wrong and knew that they were

sticking the homeowners for substantial extra costs. Through summary judgments

long before discovery had gotten off the ground they: (1) wrongfully got a first

summary judgment on grounds not addressed in the Motion; (2) defeated a motion

for new trial where the evidence showed that the first summary judgment shouldn’t

have been granted at all; (3) wrongfully got a no evidence summary judgment when

there was evidence of duty and causation; and (4) obtained an indemnity award for

far more than they deserved. 27 Plaintiff asks that the first summary judgment be reversed, the motion for new

trial be granted, the no evidence summary judgment be reversed, this case be

returned to the trial court for trial, and, if indemnity is still awarded, that it be for a

much lower sum in keeping with reasonable and necessary fees. Plaintiff asks for

such other and further relief as may be just.

Respectfully submitted,

_____/s/ MB CHIMENE__________ THE CHIMENE LAW FIRM Michele Barber Chimene TBN 04207500 2827 Linkwood Dr. Houston, TX. 77025 PH: 832 940-1471; no fax michelec@airmail.net

LAW OFFICES OF M. SUSAN RICE M. Susan Rice TBN 10393380 39340 IH-10 West, Suite D Boerne, TX. 78006 PH: 888 840-1593 srice@msricelaw.com

CERTIFICATE OF COMPLIANCE

This brief was typed in proportional 14 pt. Times Roman font and is 8209 words per the Rules of Appellate Procedure. ______/s/ MB CHIMENE_________

28 CERTIFICATE OF SERVICE

A true and correct copy of this Brief and Appendix has been served via ECF and email on Mr. Joseph Callier, counsel for Defendants, at 4900 Woodway, Ste. 700, Houston, TX. 77056 on April 28, 2015. _____/s/ MB CHIMENE__________

29 No. 14-14-00604-CV On Appeal to the Fourteenth Court Of Appeals Houston, Texas

Bridgestone Lakes Community Improvement Association, Inc. Appellant

ON APPEAL FROM CAUSE NO. 2011-53723-CV IN THE 152nd DISTRICT COURT OF HARRIS COUNTY. TEXAS

APPENDIX

1. Order (Motion for Summary Judgment) 2. Order (Motion for Rehearing & Motion for New Trial) 3. Order (Motion for No Evidence Summary Judgment) 4. Findings of Fact 5. Final Judgment 6. Modified Final Judgment 7. Detention Pond Agreement

30 TAB 1

31 I I

10/24/2012 02:51 :25 PM 713-755-1451 Page 1 /1 Filed 12 October 24 P2:51 Chris Daniel ·District Clerk Harris County FAX15336340

CAUSE NO. 2011-53723

BRIDGESTONE LAKES COMMUNITY § IN THE DISTRICT COURT IMPROVEMENT ASSOCIAITON, INC. § § v. § HARRIS COUNTY, TEXAS § BRIDGESTONE LAKES DEVEI..OPMENT § COMPANY, INC., ET AL § 152N° .JUDICIAL DISTRlCT

ORDER

On _ _ _ _ _ _ _ _, 2012, this court considered Defendants Bridgestone Lakes

Development Company, Inc., Robert A. Hudson, Claudia J. Hudson and Tiffany A. Roath's

Motion for Summary Judgment. After considering the Motion, any response, arguments of

counsel, and applicable law, the Court GRANTS the Motion. It is therefore

ORDERED that Plaintiff's claims against Defendants Bridgestone Lakes Development

Company, Inc., Robert A. Hudson, Claudia J. Hudson and Tiffany A. Roath's are hereby

dismissed.

SIGNED on this da of DEC 2 1 lUlZ , 2012. _y~J:~ WDGE PRESIDIN CertifiedDocumentNumber:54277908-Page1of1

St ar No. 03663500 4900 Woodway, Suite 700 Houston, Texas 77056 Telephone: (713) 439-0248 Facsimile: (713) 439-1908 Attorney for Defendants, BEUDGESTONELAKESDEVELOPMENT COMPANY, INC. AND ROBERT A. HUDSON, CLAUDIAJ. HUDSON AND TIFFANY A. ROATH, INDIVIDUALLY

H:\DOCS\BRIDGESTONE\PLEADINGS\ORDER GRANTING MOTION FOR SUMMARY nJDGllfENT.DOCX I, Chris Daniel, District Clerk of Harris County, Texas certify that this is a true and correct copy of the original record filed and or recorded in my office, electronically or hard copy, as it appears on this date. Witness my official hand and seal of office this April 28, 2015

Certified Document Number: 54277908 Total Pages: 1

Chris Daniel, DISTRICT CLERK HARRIS COUNTY, TEXAS

In accordance with Texas Government Code 406.013 electronically transmitted authenticated documents are valid. If there is a question regarding the validity of this document and or seal please e-mail support@hcdistrictclerk.com TAB 2 04/18/2013 12:36:47 PM 713-755-1451 Page 1/2 Filed 13 April18 P12:37 Chris Daniel - District Clerk Harris County FAX15455923 CAUSE NO. 2011-53723

BRIDGESTONE LAKES COMMUNITY § IN THE DISTRICT COURT IMPROVEMENT ASSOCIAITON, INC. § § v. § HARRIS COUNTY, TEXAS § BRIDGESTONE LAKES DEVELOPMENT § COMPANY, INC., ET AL § 152ND JUDICIAL DISTRICT

On ----~-,._.....,_, 2013, this court considered Plaintiff/Counter Defendant

Bridgestone Lakes Community Improvement Association, Inc.'s Amended Request for Rehearing

and Motion for New Trial and Defendants/Counterclaimants Robert A. Hudson, Claudia J. Hudson

and Tiffany A. Roath's Motion for Sanctions. After considering Bridgestone Lakes Community

Improvement Association, Inc.'s Motion, arguments of counsel, and applicable law, Plaintiffs

Amended Request for Rehearing and Motion for New Trial is DENIED.

dants/Counterclaimants Robert A. Hudson, Claudia J. Hudson and

on for Sanctions, arguments of counsel, and applicable law, the Motion for

Sanctions is G

to Defendants/Counterclaimants Robert A. --------~-------

Hudson, Claudia A. Roath, consistent with CPRC §10.002, as a sanction for CertifiedDocumentNumber:55409825-Page1of2

filing an Amended ehearing R/ uest and Motion for New Trial which, based on the Court's review

of the pleadings of lain · Counter Defendant Bridgestone Lakes Community Improvement

osition of Eugene "Gene "Conner, shows that the amended rehearing

summary jud in Plaintiff/Counter Defendant Bridgcstone Lakes Community

10 H:\DOCSIBRIDGESTONE\PLEADINGSI4-18-13DEFENDANTS REPLYPL.\INTJFF AMENDED MOTION FOR REHEARING AND NEW TRIALDOC

RECORDER'S MEMORANDUM This instrument 1s of poor quality at the t1me of imagmg 04/18/2013 12:36:47 PM 713-755-1451 Page 2 I 2

Improvement A ociation, Inc.'s initial Rehearing Request and Motion for New Trial was without /

SIGNED on this _ _ day of A,_~ GE PRESIDING CertifiedDocumentNumber:55409825-Page2of2

11 H:\DOCS\BRIDGESTONe,pLEADINGS\4·18-13DEFENDANTS REPLYPLAINTIFF AMENDED MOTION FOR REHEARING AND NEW TRIAL DOC I, Chris Daniel, District Clerk of Harris County, Texas certify that this is a true and correct copy of the original record filed and or recorded in my office, electronically or hard copy, as it appears on this date. Witness my official hand and seal of office this April 28, 2015

Certified Document Number: 55409825 Total Pages: 2

In accordance with Texas Government Code 406.013 electronically transmitted authenticated documents are valid. If there is a question regarding the validity of this document and or seal please e-mail support@hcdistrictclerk.com TAB 3 11/20/2013 12 29 43 PM 713-7 55-1451 P-J. Page 1/2 Filed 13 November 20 P12:30 Chris Daniel - District Clerk (I A-) Harris County FAX15632218

BRIDGESTONE LAKES COMMUNITY § IN THE DISTRICT COURT IMPROVEMENT ASSOCIAITON, INC. § § v. § HARRIS COUNTY, TEXAS § BRIDGESTONE LAKES DEVELOPMENT § COMPANY, INC.,ET AL § 152ND JUDICIAL DISTRICT

O n - - - - - - - - - ' 2013, this court considered Defendants Bridgestone Lakes

Development Company, Inc., Robert A. Hudson, Claudia J. Hudson and Tiffany A. Roath's No

Evidence Motion for Summary Judgment filed on November 20, 2013. After considering the

Motion, any response, arguments of counsel, and applicable law, the Court GRANTS the

Motion. It is therefore

ORDERED that Plaintiffs claims against Defendants Bridgestone Lakes Development

Company, Inc., Robert A. Hudson. Claudia J. Hudson and Tiffany A. Roath's are hereby

SIGNED on this _ _ day of MAR 0 7 2014,20 .

~~ CertifiedDocumentNumber:59945464-Page1of2

8 11/20/2013 12 29 43 PM 713-7 55- 1451 Page 2/2

APPROVED:

-~P.nn A.nur~mcr State No. 03663500 4900 Woodway, Suite 700 Houston, Texas 77056 Telephone: (713) 439-0248 Facsimile: (713) 439-1908 Attorney for Defendants, BRIDGESTONE LAKES DEVELOPMENT COMPANY, INC. ROBERT A. HUDSON, CLAUDIA J. HUDSON AND TIFFANY A. ROATH, INDIVIDUALLY CertifiedDocumentNumber:59945464-Page2of2

9 I, Chris Daniel, District Clerk of Harris County, Texas certify that this is a true and correct copy of the original record filed and or recorded in my office, electronically or hard copy, as it appears on this date. Witness my official hand and seal of office this April 28, 2015

Certified Document Number: 59945464 Total Pages: 2

In accordance with Texas Government Code 406.013 electronically transmitted authenticated documents are valid. If there is a question regarding the validity of this document and or seal please e-mail support@hcdistrictclerk.com TAB 4 CAUSE NO. 2011-53723

BRIDGESTONE LAKES COMMUNITY § IN THE DISTRICT COURT IMPROVEMENT ASSOCIAITON, INC. § § FILED V. § HARRIS COUNTY, ~·8aniel § District Clerk BRIDGESTONE LAKES DEVELOPMENT § JUN 10 2014 COMPANY, INC., ET AL § 152nd JUDICIAllme:,_D....,I"iiST:-:R:f:I'*C~T~=---- Harrta County, Taxaa

FINDINGS OF FACT AND CONCLUSIONS OF LA ~---ft:":":'~--- oaputy

The above numbered and titled cause came to trial before the Court without a jury on

April 9, 2014. All parties and their attorneys were present. After considering the pleadings, prior

rulings by the Court, the evidence and the arguments from counsel, the Court makes its findings

of fact and conclusions of law as follows:

FINDINGS OF FACT:

1. On or about September 8, 2011, Bridgestone Lakes Community Improvement

Association, Inc. ("BLCIA") filed suit against Bridgestone Lakes Development Company, Inc.

("Developer") and former BLCIA Director/Officer, Robert A. Hudson, Claudia J. Hudson and

Tiffany A. Roath ("Directors/Officers") for allegedly failing to construct the Bridgestone Lakes

Section 1 Detention Pond consistent with plans causing an increase in erosion to pond side

slopes.

2. On or about December 22, 2011, Joseph Alan Callier, Callier & Garza, L.L.P. was CertifiedDocumentNumber:61142952-Page1of10

retained by Developer and Directors/Officers to provide legal representation against allegations

contained in the BLCIA suit.

3. Consistent with BLCIA Bylaw Article XI, Section 5-Indemnification, on or about

February 6, 2012, former BLCIA Directors/Officers filed a counterclaim for indemnity against

BLCIA for fees and expenses incurred by virtue of being made defendants to a suit due to alleged activities as BLCIA Directors/Officers.

4. On or about December 21, 2012, this Court granted a summary judgment dismissing all

BLCIA causes of action against Developer and former BLCIA Directors/Officers.

5. On or about April 12, 2013, this Court found that former BLCIA Directors/Officers were

entitled to be indemnified under BLCIA Bylaw Article XI, Section 5-Indemnification.

6. On or about July 3, 2013, BLCIA filed a Fourth Amended Petition against Developer and

former BLCIA Directors/Officers alleging the similar causes of action described in the suit

dismissed on December 21, 2012.

7. On or about March 7, 2014, this Court granted a Summary Judgment dismissing all

BLCIA causes of action against Developer and former BLCIA Directors/Officers in Plainitff's

Fourth Amended Petition.

8. The legal services mv01ce #42840, dated January 5, 2012, in the total amount of

$4,600.00 was for work performed and expenses incurred on behalf of Developer and former

BLCIA Directors/Officers; however, since only former BLCIA Directors/Officers are entitled to

indemnity, then 25% of fees and expenses were incurred on behalf of Developer and 75% were

incurred on behalf of Directors/Officers. Therefore, the amount incurred on behalf of

Directors/Officers is $3,450.00.

9. The legal services invoice #42876, dated February 6, 2012 in the total amount of CertifiedDocumentNumber:61142952-Page2of10

$11,905.44 was for work performed and expenses incurred on behalf of Developer and former

BLCIA Directors/Officers; however, since only former BLCIA Directors/Officers are entitled to

indemnity, then 25% of fees and expenses were incurred on behalf of Developer and 75% were

incurred on behalf of Directors/Officers. Therefore, the amount incurred on behalf of

Directors/Officers is $8,929.08.

2 10. The legal services invoice #42911, dated March 5, 2012 in the total amount of $1,536.72

was for work performed and expenses incurred on behalf of Developer and former BLCIA

Directors/Officers; however, since only former BLCIA Directors/Officers are entitled to

indemnity, then 25% of fees and expenses were incurred on behalf of Developer and 75% of the

fees and expenses were incurred on behalf of Directors/Officers. Therefore, the amount incurred

on behalfofDirectors/Officers is $1,152.54.

9. The legal services invoice #42975, dated April 3, 2012, in the total amount of $1,507.00

was for work performed and expenses incurred on behalf of Developer and former

Directors/Officers; however, since only former BLCIA Directors/Officers are entitled to

indemnity, then 25% of fees and expenses were incurred on behalf of Developer and 75% of the

fees and expenses were incurred on behalf of Directors/Officers. Therefore, the amount incurred

on behalf of Directors/Officers is $1, 130.25.

10. The legal services invoice #43009, dated May 3, 2012, in the total amount of $980.00

was for work performed and expenses created on behalf of Developer and former BLCIA

Directors/Officers; however, since only Directors/Officers are entitled to indemnity, then 25% of

fees and expenses benefitted Developer and 75% of the fees were incurred on behalf of

Directors/Officers. Therefore, the amount incurred on behalf of Directors/Officers is $735.00.

11. The legal services invoice #43067, dated June 4, 2012, in the total amount of $2,420.00 CertifiedDocumentNumber:61142952-Page3of10

was for work performed and expenses created on behalf of Developer and former BLCIA

Directors/Officers; however, since only Directors/Officers are entitled to indemnity, then 25% of

fees were incurred on behalf of Developer and 75% of the fees were incurred on behalf of

Directors/Officers. Therefore, the amount incurred on behalf of Directors/Officers is $1 ,815.00.

12. The legal services invoice #43098, dated July 3, 2012, in the total amount of $2,120.00

3 was for work performed and expenses created on behalf of Developer and former BLCIA

Directors/Officers; however, since only Directors/Officers are entitled to indemnity, then 25% of

fees and expenses were incurred on behalf of Developer and 75% of the fees and expenses were

incurred on behalf of Directors/Officers. Therefore, the amount incurred on behalf of

Directors/Officers is $1 ,590.00.

13. The legal services invoice #43134, dated August 3, 2012, in the total amount of $80.00

was for work performed and expenses created on behalf of Developer and former BLCIA

Directors/Officers; however, since only Directors/Officers are entitled to indemnity, then 25% of

fees and expenses were incurred on behalf of Developer and 75% of the fees and expenses were

incurred on behalf of Directors/Officers. Therefore, the amount incurred on behalf of

Directors/Officers is $60.00.

14. The legal services invoice #43171, dated September 4, 2012, in the total amount of

$7,260.00 was for work performed and expenses created on behalf of Developer and former

BLCIA Directors/Officers; however, since only Directors/Officers are entitled to indemnity, then

25% of fees and expenses were incurred on behalf of Developer and 75% of the fees and

expenses were incurred on behalf of Directors/Officers. Therefore, the amount incurred on

behalf of Directors/Officers is $5,445.00.

15. The legal services invoice #43204, dated October 2, 2012, in the total amount of CertifiedDocumentNumber:61142952-Page4of10

$1,220.00 was for work performed and expenses created on behalf of Developer and former

BLCIA Directors/Officers; however, since only Directors/Officers are entitled to indemnity, then

25% of fees and expenses were incurred on behalf of Developer and 75% of the fees and

expenses were incurred on behalf of Directors/Officers. Therefore, the amount incurred on

behalf of Directors/Officers is $915.00.

4 16. The legal services invoice #43264, dated November 2, 2012, in the total amount of

$6,800.00 was for work performed and expenses created on behalf of Developer and former

BLCIA Directors/Officers; however, since only Directors/Officers are entitled to indemnity, then

25% of fees and expenses were incurred on behalf of Developer and 75% of the fees and

expenses were incurred on behalf of Directors/Officers. Therefore, the amount incurred on

behalf of Directors/Officers is $5,1 00.00.

16. The legal services invoice #43286, dated December 4, 2012, in the total amount of

$720.00 was for work performed and expenses created on behalf of Developer and former

BLCIA Directors/Officers; however, since only Directors/Officers are entitled to indemnity, then

25% of fees and expenses were incurred on behalf of Developer and 75% of the fees and

expenses were incurred on behalf of Directors/Officers. Therefore, the amount incurred on

behalf of Directors/Officers is $540.00.

17. The legal services invoice #43322, dated January 4, 2013, in the total amount of

$9,159.43 was for work performed and expenses created on behalf of Developer and former

BLCIA Directors/Officers; however, since only Directors/Officers are entitled to indemnity, then

25% of fees and expenses were incurred on behalf of Developer and 75% of the fees and

expenses were incurred on behalf of Directors/Officers. Therefore, the amount incurred on

behalf of Directors/Officers is $6,869.57. CertifiedDocumentNumber:61142952-Page5of10

18. The legal services invoice #43348, dated February 4, 2013, in the total amount of

$5,600.00 was for work performed and expenses created on behalf of Developer and former

BLCIA Directors/Officers; however, since only Directors/Officers are entitled to indemnity, then

25% of fees and expenses were incurred on behalf of Developer and 75% of the fees and

expenses were incurred on behalf of Directors/Officers. Therefore, the amount incurred on

5 behalf of Directors/Officers is $4,200.00.

19. The legal services invoice #43390, dated March 1, 2013, in the total amount of$2,670.86

was for work performed and expenses created on behalf of Developer and former BLCIA

Directors/Officers; however, since only Directors/Officers are entitled to indemnity, then 25% of

fees and expenses were incurred on behalf of Developer and 75% of the fees and expenses were

incurred on behalf of Directors/Officers. Therefore, the amount incurred on behalf of

Directors/Officers is $2,003.15.

20. The legal services invoice #43412, dated April1, 2013, in the total amount of$10,208.25

was incurred only on behalf of Directors/Officers. Therefore, the amount incurred on behalf of

Directors/Officers is $10,208.25.

21. The legal services invoice #43469, dated May 2, 2013, in the total amount of$11,440.00

was incurred only on behalf of Directors/Officers. Therefore, the amount incurred on behalf of

Directors/Officers is $11,440.00.

22. The legal services invoice #43514, dated June 4, 2013, in the total amount of $1,920.00

was incurred only on behalf of Directors/Officers. Therefore, the amount incurred on behalf of

Directors/Officers is $1 ,920.00.

23. The legal services invoice #43535, dated July 1, 2013, in the total amount of $2,380.00

was incurred only on behalf of Directors/Officers. Therefore, the amount incurred on behalf of CertifiedDocumentNumber:61142952-Page6of10

Directors/Officers is $2,380.00.

24. The legal services invoice #43559, dated August 5, 2013, in the total amount of

$2,036.00 was for work performed and expenses created on behalf of Developer and former

BLCIA Directors/Officers; however, since only Directors/Officers are entitled to indemnity, then

25% of fees and expenses were incurred on behalf of Developer and 75% of fees and expenses

6 were incurred on behalf of Directors/Officers. Therefore, the amount incurred on behalf of

Directors/Officers is $1,527.00.

25. The legal services invoice #43595, dated September 4, 2013, in the total amount of

$2,980.00 was for work performed and expenses created on behalf of Developer and former

BLCIA Directors/Officers; however, since only Directors/Officers are entitled to indemnity, then

25% of fees and expenses were incurred on behalf of Developer and 75% of fees and expenses

were incurred on behalf of Directors/Officers. Therefore, the amount incurred on behalf of

Directors/Officers is $2,235.00.

26. The legal services invoice #43676, dated December 3, 2013, in the total amount of

$2,380.00 was for work performed and expenses created on behalf of Developer and former

BLCIA Directors/Officers; however, since only Directors/Officers are entitled to indemnity, then

25% of fees and expenses were incurred on behalf of Developer and 75% of the fees and

expenses were incurred on behalf of Directors/Officers. Therefore, the amount incurred on

behalf of Directors/Officers is $1,785.00.

27. The legal services invoice #43709, dated January 1, 2014, in the total amount of

$12,206.00 was for work performed and expenses created on behalf of Developer and former

BLCIA Directors/Officers; however, since only Directors/Officers are entitled to indemnity, then

25% of fees and expenses were incurred on behalf of Developer and 75% of the fees and CertifiedDocumentNumber:61142952-Page7of10

expenses were incurred on behalf of Directors/Officers. Therefore, the amount incurred on

behalfofDirectors/Officers is $9,154.50.

28. The legal services invoice #43741, dated February 4, 2014, in the total amount of

$1,829.00 was for work performed and expenses created on behalf of Developer and former

BLCIA Directors/Officers; however, since only Directors/Officers are entitled to indemnity, then

7 25% of fees and expenses were incurred on behalf of Developer and 75% of the fees and

expenses were incurred on behalf of Directors/Officers. Therefore, the amount incurred on

behalf of Directors/Officers is $1 ,3 71.7 5.

28. The legal services invoice #43768, dated March 4, 2014, in the total amount of$2,695.05

was for work performed and expenses created on behalf of Developer and former BLCIA

Directors/Officers; however, since only Directors/Officers are entitled to indemnity, then 25% of

fees and expenses were incurred on behalf of Developer and 75% of the fees and expenses were

incurred on behalf of Directors/Officers. Therefore, the amount incurred on behalf of

Directors/Officers is $2,021.29.

29. The legal services incurred but not invoiced for the month of March 2014, in the total

amount of $6,151.13 was for work performed and expenses incurred on behalf of Developer and

former BLCIA Directors/Officers; however, since only Directors/Officers is entitled to

indemnity, then up until March 7, 2014, 25% of fees and expenses were incurred on behalf of

Developer and 75% of the fees and expenses were incurred on behalf of Directors/Officers.

Therefore, the amount incurred on behalf of Directors/Officers is $4,613.35 for the month of

March 2014.

30. The legal services incurred but not invoiced for (pretrial preparation of witnesses and

presentation of evidence) for trial to the Court totaled 5 hours and then all legal services solely CertifiedDocumentNumber:61142952-Page8of10

benefit Directors/Officers or $2,000.00.

31. The total fees and expenses that Robert A. Hudson, Claudia J. Hudson and Tiffany A.

Roath, as contractual indemnitees, incurred for being made Defendants for allegedly being

legally responsible for damages to the Detention Pond servicing Bridgestone Lakes Section 1

(along with Developer) for breach of fiduciary duty, failure to act in good faith, fraud,

8 negligence, gross-negligence and willful misconduct while acting as Director/Officer of the

Bridgestone Lakes Community Improvement Association, Inc. is $94,590.73.

32. Should this matter be subject to an appeal, the evidence is that attorney's fees in the

amount of $14,000.00 will be incurred for any appeal of this matter to the Court of Appeals;

$4,000.00 will be incurred for any petition for review of this matter to the Supreme Court; and

$10,000.00 will be incurred for any granted petition for review of this matter to the to the

Supreme Court.

CONCLUSIONS OF LAW:

1. Bridgestone Lakes Community Improvement Association, Inc. ("BLCIA") Bylaw Article

XI, Section 5-Indemnification, states in pertinent part, that "The Association shall indemnify any

director, officer or employee of the Association, against expenses actually and necessarily

incurred by him and any amount paid in satisfaction of judgments in connection with any action,

suit or proceedings, whether civil or criminal in nature, in which he is made a party by reason of

being or having been such a director, officer or employee (whether or not a director, officer or

employee at the time such costs and expenses are incurred by or imposed upon him) except in

relation to matters as to which he shall be judged in such action, suit or proceedings to be liable

for gross negligence or willful misconduct in the performance of duty." Since there is a judicial

finding (through summary judgment signed December 21, 2012 and March 7, 2014) that neither CertifiedDocumentNumber:61142952-Page9of10

Robert A. Hudson, Claudia J. Hudson or Tiffany A. Roath were liable for any acts of gross

negligence or willful misconduct while performing as Director/Officer of BLCIA, BLCIA is

indebted to contractual indemnitees Robert A. Hudson, Claudia J. Hudson and Tiffany A. Roath.

2. Consistent with Tony Gullo Motors v. Chapa, 212 S.W. 3d 299 (Tex. 2006), attorney's

fees and expenses were segregated between Bridgestone Lakes Development Company, Inc. and

9 contractual indemnitees Robert A. Hudson, Claudia J. Hudson and Tiffany A. Roath and Robert

A. Hudson, Claudia J. Hudson and Tiffany A. Roath are entitled to recover the fees and expenses

incurred as a result of Bridgestone Lakes Community Improvement Association, Inc.'s suit

against them as former Directors/Officers of the Association. Bridgestone Lakes Community

Improvement Association, Inc. is indebted in the sum of $94,590.73 (as contractual indemnitor)

to Robert A. Hudson, Claudia J. Hudson and Tiffany A. Roath (as defendants/contractual

indemnitees) for reasonable and necessary attorney's fees and expenses incurred by them as a

result of BLCIA making each a party to this lawsuit based on their activities as BLCIA

Directors/Officers.

3. Should this matter be appealed and Robert A. Hudson, Claudia J. Hudson and Tiffany A.

Roath are prevailing parties in such appeal, then the indebtedness shall increase as follows:

attorney's fees in the amount of$14,000.00 for any appeal ofthis matter to the Court of Appeals;

$4,000.00 for any petition for review of this matter to the to the Supreme Court; and $10,000.00

for any granted petition for review of this matter to the to the Supreme Court.

SIGNED June 10, 2014. CertifiedDocumentNumber:61142952-Page10of10

10 I, Chris Daniel, District Clerk of Harris County, Texas certify that this is a true and correct copy of the original record filed and or recorded in my office, electronically or hard copy, as it appears on this date. Witness my official hand and seal of office this April 28, 2015

Certified Document Number: 61142952 Total Pages: 10

In accordance with Texas Government Code 406.013 electronically transmitted authenticated documents are valid. If there is a question regarding the validity of this document and or seal please e-mail support@hcdistrictclerk.com TAB 5 CAUSE NO. 2011-53723

BRIDGESTONE LAKES COMMUNITY § IN THE DISTRICT COURT IMPROVEMENT ASSOCIATION, INC. § § v. § HARRIS COUNTY, TEXAS § BRIDGESTONE LAKES DEVELOPMENT § COMPANY, INC., ET AL § 152nd JUDIM.I,l~l.rAT ~ri;D'ameF' District Clerk

JUN 3 0 2014 JUDGMENT Tlme:_--:":"--:o-:--:--::---- Harrla County, Texas

BY.---~=--~---- On April 9, 2014, the above matter was called to trial and the parties aBY:f~afed in person

and with their Attorneys of Record, Plaintiff/Counter-Defendant Bridgestone Lakes Community

Improvement Association, Inc., through Attorney of Record, M. Susan Rice, and

Defendants/Counter-Plaintiffs Robert A. Hudson, Claudia J. Hudson and Tiffany A. Roath,

through Attorney of Record, Joseph Alan Callier, both announced ready for trial, a jury was

waived and the Court, sitting as trier of fact, heard evidence.

At the conclusion of the evidence, the Court concluded that Robert A. Hudson, Claudia J.

Hudson and Tiffany A. Roath, consistent with a contractual mdemnity provision contained

within Bylaws of Bridgestone Lakes Community Improvement Association, Inc., Article XI-

Section 5, were entitled to receive a judgment against Bridgestone Lakes Community CertifiedDocumentNumber:61390024-Page1of2

Improvement Association, Inc. for reasonable and necessary attorney's fees and expenses

incurred by each by being made a Defendant by Bridgestone Lakes Community Improvement

Association, Inc. to this lawsuit based on their activities as Bridgestone Lakes Community

Improvement Association, Inc. Directors/Officers. It is therefore

ORDERED that Robert A. Hudson, Claudia J. Hudson and Tiffany A. Roath receive

$ qt.[I qq0, 73 from Bridgestone Lakes Community Improvement Association, Inc. It is

RECORDER'S MEMORANDUM This Instrument JS of poor quality at the lime of 1magmg f

further

ORDERED that Robert A. Huds , Claudia J. Hud on and Tiffany A. Roath may

receive $14,000 from Bridgestone Lakes ommunity Impro ement Association, Inc. for any

appeal of this matter to the Court of Appeal ; $4,000 for any tition for review of this matter to

the Supreme Court; and $10,000 should the petition be granted. It is finally

ORDERED that taxable court costs are charged against Bridgestone Lakes Community

Improvement Association, Inc. and all writs and processes for the enforcement and collection of

this Judgment and the costs of Court, will issue as necessary. All other relief not expressly

granted herein is DENIED.

SIGNED on this ___ day of JUN 2 7 2014 , 2014 .

JU~ CertifiedDocumentNumber:61390024-Page2of2 I, Chris Daniel, District Clerk of Harris County, Texas certify that this is a true and correct copy of the original record filed and or recorded in my office, electronically or hard copy, as it appears on this date. Witness my official hand and seal of office this April 28, 2015

Certified Document Number: 61390024 Total Pages: 2

In accordance with Texas Government Code 406.013 electronically transmitted authenticated documents are valid. If there is a question regarding the validity of this document and or seal please e-mail support@hcdistrictclerk.com TAB 6 7/1/2014 3 51 59 PM Chns Dan1el - D1stnct Clerk Harns County Envelope No 1700236 By KATINA WILLIAMS

BRIDGESTONE LAKES COMMUNITY § IN THE DISTRICT COURT IMPROVEMENT ASSOCIATION, INC. § § v. § HARRIS COUNTY, TEXAS § BRIDGESTONE LAKES DEVELOPMENT § COMPANY, INC., ET AL § 152nd JUDICIAL DISTRICT

MODIFIED FINAL JUDGMENT

On April 9, 2014, the above matter was called to trial and the parties appeared in person

and with their Attorneys of Record, Plaintiff/Counter-Defendant Bridgestone Lakes Community

Improvement Association, Inc., through Attorney of Record, M. Susan Ri(!e, and

Defendants/Counter-Plaintiffs Robert A. Hudson, Claudia J. Hudson and Tiffany A. Roath,

through Attorney of Record, Joseph Alan Callier, both announced ready for trial, a jury was

waived and the Court, sitting as trier of fact, heard evidence.

At the conclusion of the evidence, the Court concluded that Robert A. Hudson, Claudia J.

Hudson and Tiffany A. Roath, consistent with a contractual indemnity provision contained

within Bylaws of Bridgestone Lakes Community Improvement Association, Inc., Article XI-

Section 5, were entitled to receive a judgment against Bridgestone Lakes Community

Improvement Association, Inc. for reasonable and necessary attorney's fees and expenses CertifiedDocumentNumber:61672276-Page1of2

incurred by each by being made a Defendant by Bridgestone Lakes Community Improvement

Association, Inc. to this lawsuit based on their activities as Bridgestone Lakes Community

Improvement Association, Inc. Directors/Officers. It is therefore .,

ORDERED that Robert A. Hudson, Claudia J. Hudson and Tiffany A. Roath receive

$94,990.73 from Bridgestone Lakes Community Improvement Association, Inc., which shall

RECORDER'S MEMORANDUM This 1nstrument IS of poor quality at the ume of 1mag1ng accrue post-judgment interest at 5% compounded annually until satisfied. It is further

ORDERED that Robert A. Hudson, Claudia J. Hudson and Tiffany A. Roath, if

prevailing parties, shall receive $14,000 from Bridgestone Lakes Community Improvement

Association, Inc. for any appeal of this matter to the Court of Appeal~OO for any petition for review of this matter to the Supreme Court; and $10,000 should the petition be granted. t is

finally .~ ~ J;M.Q ~_, .yu ~ ~ ORDERED that taxable court costs are charged against Bridgestone Lakes Community

Improvement Association, Inc. and all writs and processes for the enforcement and collection of

this Ju~gment and the costs of Court, will issue as necessary. All other relief not expressly

granted _herein is DENIED.

SIGNED on this ___ day of JUL 2 1 2014 , 2014 _

~A JUDGE PRESIDING CertifiedDocumentNumber:61672276-Page2of2 I, Chris Daniel, District Clerk of Harris County, Texas certify that this is a true and correct copy of the original record filed and or recorded in my office, electronically or hard copy, as it appears on this date. Witness my official hand and seal of office this April 28, 2015

Certified Document Number: 61672276 Total Pages: 2

In accordance with Texas Government Code 406.013 electronically transmitted authenticated documents are valid. If there is a question regarding the validity of this document and or seal please e-mail support@hcdistrictclerk.com TAB 7 I, Chris Daniel, District Clerk of Harris County, Texas certify that this is a true and correct copy of the original record filed and or recorded in my office, electronically or hard copy, as it appears on this date. Witness my official hand and seal of office this April 28, 2015

Certified Document Number: 51588158 Total Pages: 15

In accordance with Texas Government Code 406.013 electronically transmitted authenticated documents are valid. If there is a question regarding the validity of this document and or seal please e-mail support@hcdistrictclerk.com