Richardson Lifestyle Ass'n v. Houston

853 S.W.2d 796, 1993 Tex. App. LEXIS 1719, 1993 WL 146154
CourtCourt of Appeals of Texas
DecidedApril 27, 1993
Docket05-91-01907-CV
StatusPublished
Cited by14 cases

This text of 853 S.W.2d 796 (Richardson Lifestyle Ass'n v. Houston) 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
Richardson Lifestyle Ass'n v. Houston, 853 S.W.2d 796, 1993 Tex. App. LEXIS 1719, 1993 WL 146154 (Tex. Ct. App. 1993).

Opinion

OPINION

WHITTINGTON, Justice.

In this case, we interpret condominium bylaws regarding assessments levied upon condominium co-owners by a condominium association. Richardson Lifestyle Association (Association) appeals a judgment entered following a nonjury trial, complaining of the trial court’s failure to enforce collection of a special assessment upon co-owners for roof replacement at a condominium project. The trial court held that the Association could not enforce the assessment for roof replacement because the Association had not held a vote and received the prior approval of at least seventy-five percent of the co-owners of the condominium project. Because the work was the replacement of existing roofs, we hold that the Association was not required to obtain prior approval under the condominium bylaws. Accordingly, we reverse the trial court’s determination that the assessments were void and unenforceable, render judgment that the assessments were proper, and reverse and remand to the trial court to determine the proper amount of assessments and attorney’s fees.

*798 Background

The Association is a not-for-profit corporation that exists to administer the common elements of the Richardson Lifestyle Condominiums. The condominium declaration and bylaws allow the Association to assess each condominium co-owner a pro-rata share of the costs of administering the commons. The condominium declaration places a lien on each condominium unit and its accompanying common elements. A condominium co-owner’s interest in the unit may be foreclosed under the lien if assessments are not paid.

A five-member board of directors governs the affairs of the condominium. Condominium and association bylaws allow the board of directors to establish annual budgets. The board of directors makes annual assessments to the co-owners based upon the annual budget. The annual budget includes the estimated costs of repairs, maintenance, and replacements to the condominium project. The board of directors may make additional assessments if the initial assessment, based upon the annual budget, proves insufficient.

Other special assessments, not covered in the annual assessment authority as supplemented by the additional assessment authority, require approval of seventy-five percent of the association’s membership and seventy-five percent of all first lien mortgage holders. Capital improvements not provided for by the annual assessment or additional assessment require such approval.

Beginning in 1984, the condominium roofs showed signs of deterioration. In September 1985, roofs covering 96 of 178 units leaked. Between 1985 and 1990, the annual cost of roof repair ranged from $13,811 to $71,645. In May 1990, a City of Richardson building inspection officer found that the roofs above two buildings violated the city housing code. Parts of the roofs, worn by exposure to the elements, were not structurally sound. The leaking roofs caused deterioration of parapet walls and the interiors of units.

The board of directors asked for bids from contractors to replace the roofs. After evaluating bids — which ranged from $216,000 to $825,000 — the board of directors decided to choose a bid totalling $290,788 for replacement of the roofs and for other repairs.

In February 1989, the board of directors levied a roofing reserve assessment of $53,-000. Expenses depleted the reserve by the following year. Before entering the contract with Arco Roofing Systems on July 3, 1990, the board did not hold a vote of co-owners to authorize replacement of the roofs. The contractor started replacement of the roofs and related work in July 1990 and substantially completed it in December 1990.

Georgia E. Houston and nine other co-owners (appellees) filed this lawsuit after work had begun on the roofs. The petition, contending that replacement of the roofs was a capital improvement that required a vote, alleged violation of the Deceptive Trade Practices-Consumer Protection Act (DTPA) and breach of contract. The Association filed a counterclaim, claiming that the assessment was fully authorized without an election, seeking a declaratory judgment, a money judgment for the unpaid assessment, an order of sale foreclosing its assessment liens on appellees’ units, and attorney’s fees. The trial court temporarily enjoined the Association from enforcing or collecting the assessment against any of the appellees pending trial on the merits.

The case was tried without a jury. Based upon the amount of money expended in replacing the roofs, the trial court found that the roof replacement was a capital improvement that required prior approval of the co-owners. The trial court: (i) permanently enjoined the Association from enforcing collection of that part of the assessment arising from roof replacement; (ii) permanently enjoined enforcement of any assessment lien related to the assessment for replacement of the roofs; and (iii) found the special assessment and liens were void where they related to the assessment for replacement of the roofs. The trial court found the Association did not engage in a deceptive act or practice or an unconscionable action under the DTPA and *799 did not engage in fraudulent acts. The trial court also held that the assessment, liens, and foreclosures were valid insofar as they related to carpentry, painting, professional fees, and replenishment of depleted reserve funds.

Additionally, the trial court awarded ap-pellees attorney’s fees of $13,500 through trial and additional attorney’s fees if that portion of the judgment for appellees was upheld on appeal. The trial court denied the Association attorney’s fees at trial but awarded the Association appellate fees if that part of the judgment rendered for the Association was upheld on appeal.

The Association complains the trial court erred by (1) enjoining the Association from enforcing collection of the assessment or an assessment lien insofar as they arose from roof replacement; (2) declaring unenforceable the assessment and its enforcement lien insofar as they were related to roof replacement; (3) denying the Association’s request for a declaration of the validity of the assessment insofar as it concerned roof replacement; (4) awarding ap-pellees attorney’s fees at trial; and (5) refusing to award the Association attorney’s fees at trial. Appellees, by cross-points, complain that the trial court erred by (1) not permanently enjoining the Association from enforcing collection of any portion of the special assessment and finding that a portion of the special assessment unrelated to roof replacement was proper; (2) attaching liens to their condominium units; (3) conditionally awarding the Association attorney’s fees for the appeal of this case; and (4) miscalculating certain assessments.

The Association does not attack the legal or factual sufficiency of the trial court’s finding that the work to replace the roofs was a capital improvement. The Association contends that it is immaterial whether the work to replace the roofs was a capital improvement. It argues that the work done to the roofs was a replacement. Since the work was a replacement, the Association argues, no approval was necessary to authorize the work.

Appellees contend this case turns on whether the work to replace the roofs was a capital improvement.

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Bluebook (online)
853 S.W.2d 796, 1993 Tex. App. LEXIS 1719, 1993 WL 146154, Counsel Stack Legal Research, https://law.counselstack.com/opinion/richardson-lifestyle-assn-v-houston-texapp-1993.