Mitchell v. Rancho Viejo, Inc.

736 S.W.2d 757, 1987 Tex. App. LEXIS 7618
CourtCourt of Appeals of Texas
DecidedJune 18, 1987
Docket13-86-222-CV
StatusPublished
Cited by12 cases

This text of 736 S.W.2d 757 (Mitchell v. Rancho Viejo, Inc.) is published on Counsel Stack Legal Research, covering Court of Appeals of Texas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Mitchell v. Rancho Viejo, Inc., 736 S.W.2d 757, 1987 Tex. App. LEXIS 7618 (Tex. Ct. App. 1987).

Opinion

736 S.W.2d 757 (1987)

Billy MITCHELL, et al., Appellants,
v.
RANCHO VIEJO, INC., and Ted M. Trapp, Appellees.

No. 13-86-222-CV.

Court of Appeals of Texas, Corpus Christi.

June 18, 1987.
Rehearing Denied August 28, 1987.

*758 Joel William Ellis, Harlingen, for appellants.

Ted Compagnolo, Dennis Sanchez, Brownsville, for appellees.

Before DORSEY, UTTER and SEERDEN, JJ.

OPINION

DORSEY, Justice.

This action was brought by owners of lots in a subdivision for a declaratory judgment setting forth their rights vis-a-vis Ranch Viejo, Inc., the owner of certain large areas within the subdivision. The plaintiffs were certified as a class and were thus enabled to represent all lot owners within the subdivision. The case was tried without aid of a jury and no findings of fact were made or requested.

The defendants, appellees here, are Rancho Viejo, Inc., and Ted M. Trapp, who is the primary shareholder in Rancho Viejo, Inc.

Briefly, the evidence reveals that Rancho Viejo subdivision was established as an exclusive subdivision located around golf courses and a country club. The original developer, Valley International Properties, Inc. (V.I.P.), the common source of title to all parties, prepared and filed for record certain covenants and restrictions and two plats showing numbered lots and blocks as well as two golf courses meandering through the subdivision along with certain other areas not platted into lots.

In November, 1977, V.I.P. filed for protection under the Bankruptcy Act, while owning property in Rancho Viejo, including unsold lots and ten other tracts of land. These ten tracts included the golf courses, a convention center, club house, driving range, chipping green, and parking areas, among others. A secured creditor foreclosed on the ten tracts owned by V.I.P., and sold them to the appellee, Rancho Viejo, Inc.

Appellants, owners of residential lots in the development, brought this action in 1983 for damages and for declaratory judgment. After certification as a class, service, and discovery, trial was had before the court without a jury. The pleading upon which appellants went to trial was their Fifth Amended Original Petition consisting of twenty-five pages. Within their Fifth Amended Original Petition, appellants *759 alleged that when they bought their lots they relied on representations of V.I.P., that the subdivision was a "first class expensive residential area," and relied on the covenants and restrictions of record; that they bought with their lots a membership in the country club that was noncancelable but subject to the payment of dues; that they purchased their properties in reliance on the continued existence of the golf courses and in the prohibition of the use of any portion of the golf courses as sites for construction of dwellings or commercial enterprises; that the collection of assessments by the appellees constitutes a fraud; that the appellee Trapp commingled funds for maintenance of streets—so called "trust funds"—with the general income of Rancho Viejo, Inc.; and that Mr. Trapp never made an accounting to the property owners. Appellants also made a number of other grievances against Mr. Trapp, who allegedly owns 80% of the stock of the Rancho Viejo, Inc., which they allege is his alter ego.

Within the twenty-five pages of essentially factual pleadings and without stating legal theories, the appellants requested the following relief:

REAL PROPERTY OWNERS

1. To define by metes and bounds and to delineate upon a map the "common areas" located in the Rancho Viejo Subdivision.

2. Define the rights of real property owners in and the restrictions as to the use of said "common areas."

3. To determine whether any additional building sites can be carved out of either "common areas" or either of the two 18-hole golf courses.

4. To determine whether or not hotels or commercial business establishments and/or buildings can be constructed in said subdivision and if so to define the areas to where such building is limited.

5. To declare that said Defendants are not "developers", and never have been, under the recorded Covenants and Restrictions.

6. To legally declare that all real property owners are, have been, and will continue to be and own a fully paid up non-cancellable membership in the Rancho Country Club.

7. To determine and define their rights and responsibilities in and to the Country Club at Rancho Viejo.

8. To determine and declare that the Defendants can not obtain nor impress a lien upon real property of the Plaintiffs for Country Club dues or charges.

9. Order and decree that persons entitled to a membership in the Country Club may pay their monthly dues in to the registry of this Court until all of their membership rights have been finally determined.

10. Have a Judgment against the Defendants in the sum of $1,500,000.00 as re-payment of all monies collected by said Defendants in the past from said property owners for mowing, maintenance of common areas, street maintenance, and security together with interest thereon at the rate of 9% from the date of such collection until repaid.

COUNTRY CLUB MEMBERS

1. To declare the rights of Country Club Members in establishing rights, rules and regulations of the Club and the assessment of monthly dues.

2. To determine whether or not the present dues structure discriminates between property owners and non-property owners, residents and non-residents, in the use of the Club facilities by guest of members whether those guests are members and/or live in the subdivision or not.

3. To decree the rights of Country Club members in determining a promulgating of rights, rules and regulations of the Country Club its business enterprises and their operation.

*760 The plaintiffs also prayed that they be awarded attorney's fees.

Rancho Viejo, Inc., counter-sued the plaintiffs for amounts that had been expended by the corporation for the repair and maintenance of the streets and alleys of the subdivision, expenses incurred for the maintenance of vacant lots, providing security, garbage pickup, brush removal, and yard care within the subdivision.

At the conclusion of the trial, the court entered a judgment that denied all parties damages against the other and set forth declarations as to the rights and obligations of the parties in the subdivision. Insofar as relevant to this appeal, the trial court held that the ten tracts owned by Rancho Viejo, Inc., including the golf courses, convention center, parking area, and club house, among others, "are adjacent to and meander through the Subdivision, but are neither within the Subdivision, nor subject to the dedications shown on the recorded plats of the subdivision, nor subject to the Covenants and Restrictions of the Subdivision. . . ." The court also held that:

Rancho Viejo Inc. holds title in fee-simple to the tracts subject to the rights of Club members under the rules and regulations duly promulgated by the elected officer of the Club, but not subject to any right or interest of the Class by virtue of ownership or prior ownership of a lot or lots in the Subdivision.

The Tracts lie within the boundaries of the Town of Rancho Viejo; and, any development, subdivision or utilization of the Tracts are subject to all relevant valid ordinances and actions of the Township.

The tracts do not constitute and are not `common areas,' `green areas,' nor `golf course,' referred to in the Restrictions or so designated on the plats of the Subdivision.

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