CRVI Riverwalk Hospitality, LLC v. 425 Soledad, Ltd. and 425 Loneliness, Ltd.

Court of Appeals of Texas·Decided August 10, 2022·No. 04-20-00482-CV·Published

Opinion

Fourth Court of Appeals San Antonio, Texas MEMORANDUM OPINION

No. 04-20-00482-CV

CRVI RIVERWALK HOSPITALITY, LLC, Appellant

v.

425 SOLEDAD, LTD. and 425 Loneliness, Ltd., Appellees

From the 45th Judicial District Court, Bexar County, Texas Trial Court No. 2017-CI-20826 Honorable Mary Lou Alvarez, Judge Presiding

Opinion by: Luz Elena D. Chapa, Justice

Sitting: Luz Elena D. Chapa, Justice Beth Watkins, Justice Liza A. Rodriguez, Justice

Delivered and Filed: August 10, 2022

AFFIRMED IN PART; REVERSED AND RENDERED IN PART; REVERSED AND REMANDED IN PART

Appellant CRVI Riverwalk Hospitality, LLC appeals the trial court’s judgment declaring

a parking agreement valid and enforceable against it. On appeal, CRVI Riverwalk asserts several

points of error as to the trial court’s legal conclusions and the sufficiency of the evidence. It argues:

(1) the agreement did not create an easement appurtenant; (2) its title is protected by the shelter

rule; (3) it is a subsequent bona fide purchaser without notice under Texas Property Code § 13.001;

(4) the agreement is unenforceable under the rule against perpetuities; (5) the trial court improperly

assumed agency and imputed knowledge across distinct entities; (6) there was no estoppel by 04-20-00482-CV

contract; and (7) Appellee 425 Loneliness, Ltd. was not entitled to attorney’s fees. Because we

conclude the shelter rule applies, we reverse the trial court’s judgment for 425 Loneliness on its

declaratory judgment claim and render judgment declaring the Parking Agreement void as to CRVI

Riverwalk. We further reverse the trial court’s judgment for 425 Loneliness on attorney’s fees and

remand the case to the trial court to reconsider what award of attorney’s fees, if any, are

appropriate.

BACKGROUND

This dispute concerns an office building, a parking garage, and a hotel found along two

blocks of Soledad Street in downtown San Antonio, Bexar County, Texas. The three buildings are

connected by two tunnels: one that runs from the parking garage to the office building, and one

that runs from the office building to the hotel.

In 2005, MSPA Acquisition II, L.P.—then-owner of all three buildings—sold the office

building at 425 Soledad Street to an entity named 425 Soledad, Ltd. As part of the sale, MSPA and

425 Soledad entered into the Parking Agreement to make parking spaces in the parking garage

accessible to 425 Soledad’s employees and tenants. The Parking Agreement was not recorded with

the Bexar County Clerk.

A. The Hotel and Parking Garage

In 2006, HEI San Antonio Hotel LP (“HEI”) purchased the hotel and parking garage from

MSPA, financed by a loan from Merrill Lynch Mortgage Lending, Inc. (“MLML”) as evidenced

by two promissory notes, an “A-Note” and a “B-Note.” In 2008, Cypress Real Estate Advisors,

Inc. purchased only the B-Note through a special purpose entity named CRVI Crowne Plaza, L.P. 1

1 MLML assigned Note B to an affiliate, MLML Subdebt Holding LLC, before CRVI Crowne Plaza, L.P. purchased it.

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HEI defaulted on its Note payments in July 2012. As a result, Cypress worked with MLML and

the servicer on the A- and B-notes to put the hotel and parking garage into receivership in August

2012. In 2013, the receiver and CRVI Riverwalk executed the Receiver-CRVI Riverwalk Purchase

and Sale Agreement, and the receiver further executed and delivered to CRVI Riverwalk a special

warranty deed transferring title of the hotel and parking garage to CRVI Riverwalk.

B. The Office Building

Shortly after acquiring the office building in 2005, 425 Soledad divided the offices into

eight condominium units. In 2016 Weston Urban, LLC acquired Unit 1 through a special purpose

entity, 425 Loneliness, Ltd. When 425 Loneliness acquired Unit 1 in 2016, it reached out to CRVI

Riverwalk and requested an allocation of parking spaces granted by the Parking Agreement. CRVI

Riverwalk refused to recognize 425 Loneliness’s rights to parking spaces under the Parking

Agreement, taking the position the Parking Agreement was unenforceable. 2

C. The Lawsuit

In October 2017, 425 Soledad filed suit against CRVI Riverwalk, and in August 2018, its

petition was amended to include 425 Loneliness as a plaintiff (collectively, the “425 entities”).

The 425 entities sought, among other things, a declaratory judgment CRVI was bound by the

Parking Agreement and the agreement “shall run with the land” and bound successor-in-interest.

CRVI Riverwalk filed a counterclaim against the 425 entities, seeking, among other things, a

declaratory judgment stating the Parking Agreement did not bind it, CRVI Riverwalk did not have

notice of the Parking Agreement, and it was a bona fide purchaser of the hotel and parking garage.

By the time of trial, 425 Loneliness was the sole plaintiff because it had purchased all

condo units from 425 Soledad, and the trial court dismissed 425 Soledad’s claims for lack of

2 Weston Urban subsequently acquired 425 Soledad and Units 2 through 5, also through 425 Loneliness.

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standing. After a bench trial, the trial court rendered judgment for 425 Loneliness, granting its

declaratory judgment claim, denying CRVI Riverwalk’s declaratory judgment claim, and granting

425 Loneliness attorney’s fees and conditional appellate attorney’s fees.

This appeal followed.

STANDARD OF REVIEW

“Where, as here, the trial court issues findings of fact and conclusions of law, we review

its factual findings for sufficiency of the evidence and its legal conclusions de novo.” In re T.D.L.,

621 S.W.3d 346, 350 (Tex. App.—San Antonio 2021, no pet.). We may only reverse based on an

error of law if the error of law probably caused the rendition of an improper judgment or probably

prevented the appellant from properly presenting their case to this court. See TEX. R. APP. P.

44.1(a).

THE PARKING AGREEMENT GRANTED AN EASEMENT APPURTENANT

CRVI Riverwalk argues the Parking Agreement created a license, and the trial court erred

when it concluded the Parking Agreement created an easement appurtenant for parking for the

Office Tract. The court’s conclusions of law provide, in pertinent part:

1. The plain language of the Parking Agreement demonstrates a clear intent to bind not only 425 Soledad and MSPA, but also their successors and assigns in title. Paragraph 14 of the Parking Agreement states that the terms and conditions of the Parking Agreement shall “inure to the benefit of, and be binding upon [425 Loneliness] and MSPA and their respective successors and assigns in title.” The same paragraph also states that the terms and provisions of the Parking Agreement “shall run with the land.” Paragraph 9 also expressly contemplates that the terms of the agreement will be binding on MSPA’s successors in title, laying out the circumstances in which a successor owner of the Garage will have a right to terminate the Parking Agreement. The Parking Agreement thus creates rights that are not personal in nature, but instead endure from owner to owner thereby creating a real property interest in the Garage. Indeed, the Parking Agreement creates an easement appurtenant to the Office Building that gives the owner of the Office Building the right to use the Garage for a specific purpose: parking for the occupants of the Office Building. (alteration in original and citations omitted).

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CRVI Riverwalk Hospitality, LLC v. 425 Soledad, Ltd. and 425 Loneliness, Ltd., (Tex. Ct. App. 2022).

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