Charles Glen Hyde, Northwest Regional Airport, Inc., Texas Air Classics, Inc., Dreamships, Inc., and Hyde-Way, Inc. v. Northwest Regional Airport Property Owners Association, Inc.

• Court: Court of Appeals of Texas
• Decided: December 20, 2018
• Docket: 02-17-00385-CV
• Status: Published

Opinion

In the Court of Appeals Second Appellate District of Texas at Fort Worth ___________________________ No. 02-17-00385-CV ___________________________

CHARLES GLEN HYDE, NORTHWEST REGIONAL AIRPORT, INC., TEXAS AIR CLASSICS, INC., DREAMSHIPS, INC., AND HYDE-WAY, INC., Appellants

V.

NORTHWEST REGIONAL AIRPORT PROPERTY OWNERS ASSOCIATION, INC., Appellee

On Appeal from the 16th District Court Denton County, Texas Trial Court No. 16-05997-16

Before Sudderth, C.J.; Meier and Kerr, JJ. Opinion by Justice Meier OPINION

In this latest round of litigation involving the Northwest Regional Airport

(Airport), the trial court resolved competing traditional and no-evidence summary-

judgment motions against Appellants Charles Glen Hyde, Northwest Regional

Airport, Inc., Texas Air Classics, Inc., Dreamships, Inc., and Hyde-Way, Inc.

(collectively, the Hyde Parties) and in favor of Appellee Northwest Regional Airport

Property Owners Association, Inc. (POA). At the center of the dispute: Whether

“Integrated Deed Restrictions” (IDRs) validly amended a slew of preexisting deed

restrictions covering many Airport-area properties. At stake: Consolidating the

authority to assess fees and maintain the Airport’s common areas in the POA.

In their first four issues, the Hyde Parties argue that the trial court erred by

denying their motion for continuance and renewed plea in abatement, in ruling on the

parties’ summary-judgment motions, and by signing a final judgment that awarded the

POA greater relief than what it had sought. In their fifth issue, the Hyde Parties

challenge the trial court’s attorneys’-fees award. Limiting our analysis to the Hyde

Parties’ dispositive second, third, and fifth issues, we conclude and hold that the IDRs

failed to validly amend the prior deed restriction as a matter of law. We will reverse

the trial court’s judgment, render a summary judgment in favor of the Hyde Parties,

and remand the issue of attorneys’ fees to the trial court.

2 I. BACKGROUND

A. The land surrounding the Airport is developed and deed restricted

Edna Whyte created the Airport in 1969.1 Thereafter, at different points in

time, different individuals or entities developed and deed restricted different tracts of

land surrounding the Airport. Important for purposes of this appeal, the deed

restrictions did not employ a uniform procedure for assessing fees to maintain the

Airport’s common areas—the runway, taxiways, and access or ramp areas.

Whyte’s company, the Aero Valley Development Company (AVDCO),

developed the land generally located northeast of the Airport. The properties that

AVDCO sold granted owners access to the Airport’s common areas via an express

easement. AVDCO also deed restricted its subdivisions. Of the eight sets of deed

restrictions burdening the northeast properties, most call for an Architectural Control

Committee (ACC) to collect a fee from the property owners to maintain the Airport’s

common areas. Seven of the deed restrictions can be amended when “an instrument

signed by a majority of the then record owners of the property has been recorded.”

Hyde-Way acquired the Airport in 1982 and is the current owner. Hyde-Way

also acquired and partially developed a 119-acre tract generally located northwest of

the Airport. Like AVDCO, Hyde-Way imposed deed restrictions on the properties it

sold, but instead of conveying easements to access the Airport’s common areas,

Hyde-Way’s deed restrictions afforded property owners access to the common areas

1 The privately-owned airport was originally called the “Aero Valley Airport.” 3 via a “Runway and Taxiway License.”2 And instead of paying a fee to a committee to

maintain the common areas, property owners with a license agreement paid Hyde-

Way an annual license fee. But similar to the AVDCO restrictions, the Hyde-Way

restrictions can be amended by “an instrument signed by a majority of the then

property owners of record.”

A number of third parties developed and deed restricted several areas generally

located in the southern half of the Airport.3 According to the POA, by 2016, almost

all of the lots located in that area were burdened by some form of Hyde-Way’s deed

restrictions.4

B. Concerns about neglected runway maintenance spawn the IDRs

The ACC “disbanded long ago,” and the POA claims that Hyde allowed the

Airport’s runway “to fall into a severe state of disrepair,” using the license fees not to

maintain the Airport’s common areas but to “pay salaries to himself and his spouse to

supplement their incomes.” A number of concerned property owners consequently

devised a plan “to create a uniform system of airport governance with authority to

assess fees and maintain the runway.” The plan principally involved (1) amending all

of the preexisting deed restrictions covering the Airport-area properties to consolidate

2 The license agreement was an addendum to the Hyde-Way deed restrictions.

It appears that these parties included, among others, Triangle Aviation, Inc., 3

Cole Aviation, Inc., and Dean W. Henry. 4 Formed in 1985, the POA is a tax exempt, nonprofit corporation. 4 the authority to assess fees and maintain the Airport’s common areas in the POA and

(2) amending the POA’s bylaws to authorize it to exercise those duties.

The POA maintains that it achieved both tasks. It claims that a majority of the

Airport-area property owners signed the IDRs, which amended all of the preexisting

deed restrictions (seven of the eight AVDCO deed restrictions and the Hyde-Way

deed restrictions, including the deed restrictions imposed by other developers) by

requiring each property owner to pay an annual fee to the POA for the purpose of

maintaining the Airport’s common areas.5 The POA also amended its bylaws,

permitting its board to exercise those rights and duties prescribed by the IDRs.

C. The POA assesses fees and sues the Hyde Parties

Consistent with its newfound authority, the POA assessed fees against the

property owners to maintain the Airport’s common areas. Hyde, in turn, opined (and

published statements reflecting) that the POA lacked the authority to assess

maintenance fees. Concerned with the influence that Hyde’s actions were having on

the POA’s ability to collect maintenance fees, the POA sued the Hyde Parties,

asserting tort claims and requests for declaratory and injunctive relief. The POA

sought several declarations, including that “[t]he delegation of authority to [the POA]

was a valid delegation of authority permitted by properly amending the restrictions”

5 The IDRs provide in part, “An annual fee . . . shall be paid by each Property Owner to the Association within thirty (30) days after the date of such statement to provide for proper maintenance of common areas.”

5 and that “[the POA] is authorized to oversee, repair, maintain, and provide for the

upkeep of the runway, common areas[,] and common facilities at [the Airport], and to

assess and collect fees for that purpose according to the terms of the IDRs.”

The Hyde Parties answered and counterclaimed for declaratory relief and

various torts. They sought certain declarations that were essentially the inverse of the

POA’s declarations—“[t]he [IDRs] are invalid and unenforceable” and “[t]he [POA]

does not have the authority to financially obligate the property owners at the Airport.”

The Hyde Parties also filed a plea in abatement, arguing that the POA’s requested

declarations implicated the rights of hundreds of property owners who were not

parties to the lawsuit. The trial court denied the Hyde Parties’ plea and temporarily

enjoined them from disparaging the POA and interfering with its maintenance of the

Airport’s common areas.

Both sides later agreed to dismiss their respective tort claims and to resolve the

remaining claims by cross-motions for summary judgment—traditional motions on

their own claims and no-evidence motions on the other side’s claims. The trial court

ultimately granted the POA’s summary-judgment motions, denied the Hyde Parties’

motions, and signed a final judgment that declared in part that the IDRs (i) “validly

amended the [preexisting] deed restrictions at [the Airport]” and (ii) “validly delegated

property owners’ authority to [the POA] to maintain, repair, and provide for the

upkeep of the runway, taxiways, and ramp areas at [the Airport], and to assess and

6 collect fees for that purpose.”6 The final judgment also permanently enjoined the

Hyde Parties from making certain representations, awarded the POA judgment

against several of the Hyde Parties for varying amounts, and awarded the POA

attorneys’ fees in the amount of $51,348. The trial court denied the Hyde Parties’

motion to modify or for new trial, and this appeal followed.

II. SUMMARY-JUDGMENT RULINGS

The Hyde Parties’ second and third issues challenge the trial court’s summary-

judgment rulings. Among their arguments, they contend that instead of conclusively

proving that the IDRs were validly amended, the summary-judgment evidence

conclusively proved that the IDRs are invalid and unenforceable, thus rendering the

POA powerless to assess fees and to maintain the Airport’s common areas. The POA

responds that the IDRs validly delegated the authority to maintain the Airport’s

common areas to the POA. Fundamental rules of contract construction govern this

issue and compel us to agree with the Hyde Parties.

A. Standards of review

We review a no-evidence motion for summary judgment under the same legal

sufficiency standard as a directed verdict. Merriman v. XTO Energy, Inc., 407 S.W.3d

244, 248 (Tex. 2013). The nonmovant has the burden to produce more than a

scintilla of evidence to support each challenged element of its claims. Id. In a

6 The trial court also denied the Hyde Parties’ motion for continuance, which sought additional time to conduct discovery on several new instruments that the POA attached to its summary-judgment response. 7 traditional motion for summary judgment, the movant has the burden to show that

there is no genuine issue of material fact and that the movant is entitled to judgment

as a matter of law. Tex. R. Civ. P. 166a(c). A plaintiff is entitled to summary

judgment on a cause of action if it conclusively proves all essential elements of the

claim. See id.; MMP, Ltd. v. Jones, 710 S.W.2d 59, 60 (Tex. 1986). In reviewing either

type of summary-judgment motion, we view the evidence in the light most favorable

to the nonmovant, crediting evidence favorable to the nonmovant if reasonable jurors

could and disregarding evidence contrary to the nonmovant unless reasonable jurors

could not. Merriman, 407 S.W.3d at 248; Mann Frankfort Stein & Lipp Advisors, Inc. v.

Fielding, 289 S.W.3d 844, 848 (Tex. 2009).

When both parties move for summary judgment and the trial court grants one

motion and denies the other, the reviewing court should review both parties’

summary-judgment evidence and determine all questions presented. Mann Frankfort,

289 S.W.3d at 848. We should then render the judgment that the trial court should

have rendered. See Myrad Props., Inc. v. LaSalle Bank Nat’l Ass’n, 300 S.W.3d 746, 753

(Tex. 2009); Mann Frankfort, 289 S.W.3d at 848.

8 B. Each preexisting deed restriction was not amended by a majority of then record property owners

As alluded to above, each deed restriction that the IDRs purported to amend

could be amended only by a majority of the then record owners of the properties.7

To prove that it obtained the requisite number of signatures, the POA’s summary-

judgment evidence included, among other things, (1) the signature pages of the

property owners who approved the IDRs—documents that were recorded in the

Denton County real property records on May 12, 2016, July 19, 2016, and December

1, 2016; (2) a spreadsheet (Exhibit 18B) that identified each property owner, a legal

description of the property, the tax ID, and the set of deed restrictions burdening the

property, if any; and (3) the following image (Exhibit 18C), which divided the Airport

properties into Northeast, Northwest, and Southern regions and listed the combined

percentage of property owners in each region who approved the IDRs:

7 One recital at the outset of the IDRs states, “WHEREAS, with the exception of Restriction VI, all of the other foregoing deed restrictions allow the property owners to amend the restrictions by a majority of the then record owners of the properties.” 9 In their motion for summary judgment, the Hyde Parties identified a number of

purported deficiencies with the POA’s signature pages. In response, the POA

submitted two additional sets of signatures, both filed of record on April 27, 2017,

nearly a year after the first instrument containing signatures was recorded.

The Hyde Parties argue that the IDRs are invalid and unenforceable because

the POA’s summary-judgment evidence failed to conclusively prove that a majority of

the then property owners subject to each set of preexisting deed restrictions approved

the IDRs. Specifically, they contend,

10 Neither Exhibit 18(c) nor any other exhibit offered by the POA makes it possible to ascertain whether the POA received the approval of the required minimum number of property owners burdened by a single set of deed restrictions at a particular point in time, reflected in a single instrument, during a time when amendments were allowed under existing deed restrictions.

This argument is broad enough to identify and encompass a fatal flaw in how the

POA went about calculating whether a majority of then property owners approved

the IDRs. Consistent with the plain and unambiguous language of the preexisting

deed restrictions, the appropriate inquiry is not whether a majority of the property

owners in each of the Northeast, Northwest and Southern regions approved the

IDRs, as the POA calculated and as its Exhibits 18B and 18C reflect, but whether a

majority of the then property owners subject to each individual set of deed

restrictions approved the IDRs.

The deed restrictions here are restrictive covenants and are subject to the

general rules of contract construction. See Tex. Prop. Code Ann. § 202.001(4) (West

2014) (defining “restrictive covenant”); Tarr v. Timberwood Park Owners Ass’n, Inc., 556

S.W.3d 274, 280 (Tex. 2018). In construing a restrictive covenant, our primary task is

to seek the intent of the parties to give effect to their purposes. Voice of Cornerstone

Church Corp. v. Pizza Prop. Partners, 160 S.W.3d 657, 667 (Tex. App.—Austin 2005, no

pet.). Words used in a restrictive covenant may not be enlarged, extended, stretched,

or changed by construction. Wilmoth v. Wilcox, 734 S.W.2d 656, 657 (Tex. 1987).

Rather, we give words and phrases their commonly accepted meaning. Id. at 657–58.

11 The properties contained in the Northwest part of the Airport are burdened by

what appears to be a single set of deed restrictions (HW 1208/944), and by our

calculations (utilizing the POA’s Exhibit 18B), over 50% of the owners subject to that

set of deed restrictions approved the IDRs. But the same cannot be said for the

properties located in the Northeast and Southern regions of the Airport. The IDRs

purport to amend seven different sets of deed restrictions covering the Northeast

region of the Airport and over thirty different sets of deed restrictions covering the

Southern region of the Airport. Each set of deed restrictions burdens a different tract

of land.8 The seven AVDCO deed restrictions contain the following language:

These covenants and restrictions are to run with the land and shall be binding upon all parties and all persons claiming under them for a period of . . . ten (10) years, unless an instrument signed by a majority of the then record owners of the property has been recorded, agreeing to change the covenants in whole or in part. [Emphasis added.]

The summary-judgment record does not contain the deed restrictions burdening the

Southern properties, but the POA confirms that most of those properties are subject

to some form of the Hyde-Way deed restrictions, which aside from the time periods,

contain similar amendment language.

Neither side suggests that this language is ambiguous. Giving it its ordinary

meaning, the terms “These covenants and restrictions” and later “the covenants”

8 For example, the deed restrictions contained at Volume 922, Page 478 of the Denton County real property records burden 12.645 acres of the 47.503 acres of land out of the F.M. Woodward Survey, Abstract No. 1420. The deed restrictions contained at Volume 1002, Page 363 burden a different 8.598 acres. The deed restrictions contained at Volume 1070, Page 529 burden a different 2.389 acres. 12 plainly mean the covenants and restrictions contained in each individual deed-restriction

document. And the reference to “the property” refers to the unique tract of land

burdened by each individual set of deed restrictions, identified at the outset of each set

of deed restrictions and legally described in an attached exhibit. Appropriately

construed, the deed restrictions are amendable by a majority of the then record

property owners who are subject to each set of preexisting deed restrictions. The

same holds true for the Southern properties.

In its Exhibit 18B, the POA did not calculate the number of property owners

who approved the IDRs by determining whether a majority of the then record owners

of the properties subject to each particular set of deed restrictions voted to approve

the IDRs. If it had done so, the evidence would show that less than a majority of the

property owners who are subject to three sets of deed restrictions in the Northeast9

and to sixteen sets of deed restrictions in the Southern region10 approved the IDRs.

Instead, in both the Northeast and the Southern regions, the POA arrived at its more-

than-a-majority figures by combining the total number of property owners who

approved the IDRs and then dividing that figure by the total number of property

9 WOE 1112/465, EGW 3083/1, and WOE 1025/830. 10 HW 2436/746, 94-R0069535, HW-3212/915, HW 1207/267, HW 2004- 30142, 1234-509, HW 1208/917, 933/482, 2854-661, HW 1213/595, HW 1207/277, 4172/1330, HW 4229/3190, CC#93R0094951, HW 1556/168, 93-R0089418. 13 owners.11 The problem with this approach is that it improperly rewrites—or enlarges,

extends, stretches, or changes—the plain and unambiguous language of the respective

deed restrictions to permit an amendment by a majority of the then record property

owners who are subject to the AVDCO deed restrictions in the Northeast region or who are

subject to the deed restrictions in the Southern region.12 See Wilmoth, 734 S.W.2d at 657. But

no such language exists in the deed restrictions, we cannot infer that construction

from any other language in the restrictions, and we are unaware of any other

document or rule of law that would allow the POA to read the separate deed

restrictions burdening the properties located in either the Northeast or the Southern

regions together.13 Cf. Jim Walter Homes, Inc. v. Schuenemann, 668 S.W.2d 324, 327 (Tex.

1984) (providing that separate documents executed at the same time, for the same

purpose, and in the course of the same transaction are to be construed together);

Kartsotis v. Bloch, 503 S.W.3d 506, 516 (Tex. App.—Dallas 2016, pet. denied) (“When a

For example, according to its Exhibit 18B, the POA calculated that of 101 lot 11

owners in the Northeast region, 58, or 57.4%, approved the IDRs. 12 Indeed, in explaining that a majority of property owners approved the IDRs, the POA broke down the numbers as follows: “Fifty-one of 88 owners under the Hyde Restrictions in the northwest (58.0%); fifty-eight of 101 owners under the AVDCO Restrictions in the northeast (57.4%); and thirty-two of the remaining 57 property owners in the south (56.1%).” [Emphasis added.] 13 Nor can we speculate how this plain-meaning construction would lead to an absurd result. See Hemyari v. Stephens, 355 S.W.3d 623, 626 (Tex. 2011) (stating that courts avoid strictly construing an instrument’s language if it would lead to absurd results). 14 document is incorporated into another by reference, both instruments must be read

and construed together.”).

A majority of the then property owners subject to each set of preexisting deed

restrictions failed to approve the IDRs; therefore, as a matter of law, the IDRs are

invalid and unenforceable, and the POA lacks the authority to assess fees to maintain

the Airport’s common areas. The trial court erred by granting the POA’s summary-

judgment motions and by denying the Hyde Parties’ summary-judgment motions. We

sustain this part of the Hyde Parties’ second and third issues and need not reach their

remaining subissues. See Tex. R. App. P. 47.1.

III. ATTORNEYS’ FEES

In their fifth issue, the Hyde Parties argue that if we reverse the trial court’s

final judgment, then we should also either reverse the award of attorneys’ fees and

award them fees in certain amounts or remand this cause to the trial court to

reconsider the attorneys’ fees award. Although a party need not prevail to recover

attorneys’ fees under the Uniform Declaratory Judgments Act, after a declaratory

judgment is reversed on appeal, an award of attorneys’ fees may no longer be

equitable and just. Boerschig v. Sw. Holdings, Inc., 322 S.W.3d 752, 768 (Tex. App.—

El Paso 2010, no pet.). Therefore, we will remand the award of attorneys’ fees to the

15 trial court for its reconsideration in light of our opinion. We sustain the Hyde Parties’

fifth issue in part.14

IV. CONCLUSION

Having sustained part of the Hyde Parties’ second and third issues, we reverse

the trial court’s final judgment and render a declaratory judgment in favor of the Hyde

Parties that the IDRs are invalid and unenforceable and that the POA lacks the

authority to financially obligate the property owners at the Airport. Having sustained

the Hyde Parties’ fifth issue in part, we remand this cause to the trial court to

reconsider its award of attorneys’ fees.

/s/ Bill Meier Bill Meier Justice

Delivered: December 20, 2018

14 We need not reach the Hyde Parties’ first and fourth issues. See Tex. R. App. P. 47.1. 16