Sierra Crest Homeowners Ass'n v. Villalobos

527 S.W.3d 235, 2016 Tex. App. LEXIS 11862, 2016 WL 6473057
CourtCourt of Appeals of Texas
DecidedNovember 2, 2016
DocketNo. 08-13-00023-CV
StatusPublished
Cited by6 cases

This text of 527 S.W.3d 235 (Sierra Crest Homeowners Ass'n v. Villalobos) 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
Sierra Crest Homeowners Ass'n v. Villalobos, 527 S.W.3d 235, 2016 Tex. App. LEXIS 11862, 2016 WL 6473057 (Tex. Ct. App. 2016).

Opinion

OPINION

DAVID WELLINGTON CHEW, Chief Justice, (Senior Judge)

This is an action to enforce restrictive covenants in a residential subdivision. Margarita and Robert Villalobos built a retaining wall on a lot they owned within the Sierra Crest Subdivision. A portion of the wall collapsed when a Bobcat front-end loader struck it. Alleging that the wall was built without approval, was defective, and posed a safety risk, Sierra Crest Homeowners Association, Inc. sued for declaratory and injunctive relief. The Association also sought to recover civil damages in the amount of $200 for each day of the violation of the restrictive covenants under Section 202.004(c) of the Texas Property Code. After answering, the Villaloboses counter-sued, seeking a declaratory judgment that the Association acted arbitrarily, capriciously, and discriminatorily against them. The case proceeded to a jury trial, and the jury found that the Villaloboses did indeed violate the covenants, but it also found that the Association acted arbitrarily, capriciously, and discriminatorily and was not irreparably and imminently harmed by the breach. The trial court rendered judgment in accordance with the jury’s verdict, and awarded attorney’s fees to each party.

FACTUAL AND PROCEDURAL SUMMARY

Sierra Crest Subdivision is a gated community located in the Franklin Mountains in El Paso County, Texas. The Subdivision is governed by a properly recorded Declaration of Covenants, Conditions and Restrictions (Declaration). The Declaration provides that those owning property in the Subdivision automatically become voting and assessment-paying members of the Association, a non-profit corporation. The Declaration assigns the Association various powers and obligations concerning enforcement of the covenants in the Declaration, upkeep of the common areas, and maintenance of the subdivision’s aesthetic appeal. [238]*238The Association’s bylaws vest all powers granted to it in a board of directors.

The Declaration also provides for the creation of an Architectural Control Committee (ACC) to dictate certain construction and aesthetic standards for property ownership within the community. To ensure that property owners abide by these standards, the Declaration requires that plans for improvements be submitted to the Committee for approval before any construction can begin. Specifically, the Declaration provides that:

After such location with respect to topography and finish grade elevation has been approved and the finish grade of the Lots has been completed, such finish grade shall not be altered, changed or disturbed. Improvements constructed on each Lot must follow the natural mountain terrain with a minimum of excavation and embankment. No retaining walls or excessive cuts and fills shall be permitted without the express written consent of the ... Committee,..

In December 2010, the Villaloboses obtained the Committee’s approval to construct a home and two-tiered retaining wall on their lot, which was located on the face of the mountain directly above Sierra Crest Drive—the only road providing access to the Subdivision. While the retaining wall was being built, Carlos Figueroa, the engineer hired to design the retaining wall, changed the design to a single-tiered wall. The Villaloboses submitted the revised plans to the City of El Paso but not to the Committee. After receiving the City’s approval, Mrs, Villalobos left the revised plans for the Committee’s chair, Dr. Price1, in the Subdivision’s guardhouse, as was customarily done.

As we have mentioned, a portion of the retaining wall collapsed when a Bobcat front-end loader struck it. Debris tumbled down the mountainside and a few rocks fell on Sierra Crest Drive. The Association hired Ruben Ponce, Jr., a structural engineer, to examine the remaining portion of the retaining wall. Ponce concluded that the wall had been inadequately designed and built, and that it would collapse. The Association demanded that the Villaloboses submit remediation plans to the Committee by a certain deadline. When they failed to comply, the Association filed suit.

At trial, the contested issues were whether the Villaloboses violated the covenants by failing to obtain approval .from the Committee to construct a one-tier retaining wall; whether the wall was inadequately designed and built; whether the Association acted arbitrarily and capriciously in interpreting the covenants and enforcing them; and whether the Association was entitled to injunctive relief. With respect to these issues, the jury was asked:

QUESTION NO. 1:
Did [Appellees] fail to comply with the Declaration ... ?
QUESTION NO. 3
Do you find that the exercise of discretionary authority by [SCHA] concerning the restrictive covenants as applied to [Appellees] was arbitrary, capricious or discriminatory?
QUESTION NO. 4:
Do you find that there is any irreparable, imminent harm to [SCHA] ’s Subdivision because of the construction of the wall?

[239]*239The jury answered ‘Tes” to Questions Nos. 1 and 3 and “No” to Question No. 4. The Association did not object to the charge.

APPLICABILITY OF SECTION 202.004(a) OF THE TEXAS PROPERTY CODE

The Association’s first issue on appeal challenges the jury’s answer to Question No. 3. It argues that the jury’s finding of an arbitrary, capricious, or discriminatory act by the Association is legally irrelevant and should be disregarded. This jury question is directly related to the Association’s cause of action seeking civil damages for the Villaloboses’ violation of a restrictive covenant.2 Section 202.004 of the Texas Property Code, entitled “Enforcement of Restrictive Covenants”, provides as follows:

(a) An exercise of discretionary authority by a property owners’ association or other representative designated by an owner of real property concerning a restrictive covenant is presumed reasonable unless the court determines by a preponderance of the evidence that the exercise of discretionary authority was arbitrary, capricious, or discriminatory.
(b) A property owners’ association or other representative designated by an owner of real property may initiate, defend, or intervene in litigation or an administrative proceeding affecting the enforcement of a restrictive covenant or the protection, preservation, or operation of the property covered by the dedicatory instrument.
(c) A court may assess civil damages for the violation of a restrictive covenant in an amount not to exceed $200 for each day of the violation.

Tex. Prop. Code ann. § 202.004 (West 2007). This statute establishes a cause of action and authorizes a trial court to “assess civil damages” of up to $200 for , each day of the violation of a restrictive covenant. KBG Investments, LLC v. Greenspoint Property Owners’ Association, Inc,, 478 S.W.3d 111, 119 (Tex.App.-Houston [14th Dist.] 2015, no pet.). Subsection (a) “creates a rebuttable presumption that a property owners’ association or other representative acts reasonably in exercising its discretionary authority.” La Ventana Ranch Owners’ Ass’n, Inc. v. Davis,

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527 S.W.3d 235, 2016 Tex. App. LEXIS 11862, 2016 WL 6473057, Counsel Stack Legal Research, https://law.counselstack.com/opinion/sierra-crest-homeowners-assn-v-villalobos-texapp-2016.