Stage Run Owners Association, Inc. (Appellant/Cross-Appellee) v. Davinder Singh Baines and Parmjit K. Baines (Appellee/Cross-Appellant) and KB Home Lone Star, L.P., (Cross-Appellee)

• Court: Court of Appeals of Texas
• Decided: November 24, 2010
• Docket: 04-10-00195-CV
• Status: Published

Opinion

MEMORANDUM OPINION No. 04-10-00195-CV

STAGE RUN OWNERS ASSOCIATION, Inc., Appellant

v.

Davinder Singh BAINS and Parmjit K. Bains, Appellees/Cross-Appellants

KB HOME LONE STAR, L.P., Cross-Appellee

From the 37th Judicial District Court, Bexar County, Texas Trial Court No. 2008-CI-05745 Honorable David A. Berchelmann, Jr., 1 Judge Presiding

Opinion by: Phylis J. Speedlin, Justice

Sitting: Karen Angelini, Justice Phylis J. Speedlin, Justice Rebecca Simmons, Justice

Delivered and Filed: November 24, 2010

REVERSED AND REMANDED

1 The Honorable David A. Berchelmann, Jr., presiding judge of the 37th Judicial District Court, Bexar County, Texas, signed the final judgment; however, the Honorable Antonia Arteaga, presiding judge of the 57th Judicial District Court, Bexar County, Texas, conducted the hearing on Bains’s motion for partial summary judgment and granted that motionin Bains’s favor. 04-10-00195-CV

Stage Run Owners Association, Inc. (“the Association”) challenges the summary

judgment granted in favor of Davinder Singh Bains (“Bains”) and Parmjit K. Bains. We reverse

the judgment of the trial court, and remand the case for further proceedings.

FACTUAL AND PROCEDURAL BACKGROUND

In 2004, Bains purchased a new home from KB Home Lone Star, L.P. (“KB Home”)

located in the Stage Run subdivision. The subdivision is maintained and governed by the

Association, which was organized pursuant to the Declaration of Covenants, Conditions and

Restrictions for Stage Run (“the Declaration”). The Declaration requires submission of plans to

the Architectural Control Committee (ACC) for approval before certain improvements can be

made on home lots. Shortly after closing on the home, Bains had concrete pads installed in the

side yards and back yard of the property. Bains subsequently sought approval for the pads from

the Association. The ACC denied approval and demanded that Bains remove the concrete pads.

Three years later, the Association filed suit against Bains for the alleged breach of Article V of

the Declaration, which provides in pertinent part as follows:

No building, fence, wall, parking area, swimming pool, spa, pole, mail box, driveway, fountain, pond, tennis court, sign, exterior color or shape, or new or modification of a structure shall be commenced, erected or maintained upon any Lot or the patio or garage used in connection with any Lot after the purchase of any Lot from [KB Home], nor shall any exterior addition to or change or alteration therein be made until the plans and specifications showing the nature, kind, shape, height, materials and location of the same are submitted to and approved by the Committee.

The Association sought an injunction requiring Bains to remove the concrete ground

cover, as well as an award of statutory damages and attorney’s fees under the Declaration, the

Property Code, and the Texas Declaratory Judgment Act. See TEX. PROP. CODE ANN. § 5.006

(West 2004); TEX. CIV. PRAC. & REM. CODE ANN. § 37.009 (West 2008).

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Bains answered and filed a third-party petition against KB Home on the grounds that KB

Home arranged and negotiated for the construction of the concrete pads before Bains purchased

the house, while having knowledge of the Declaration which it created as the subdivision builder.

Further, after Bains closed on the house, KB Home paid for the installation of a drainage system

to prevent water from draining off the concrete pads onto Bains’s neighbors’ property. Bains

subsequently moved for summary judgment, contending that (1) Article V does not require ACC

approval for the concrete ground cover at issue because it is not a “structure;” and (2) even if the

ground cover was a structure prohibited by Article V, the Association impliedly waived

enforcement of the restrictive covenant because 45 other Stage Run homeowners added stone or

concrete as ground cover to their lots without ACC approval. Bains attached his affidavit along

with photos of 45 houses in the subdivision with added concrete ground cover visible from the

street.

The Association responded, contending that Bains’s own deposition established that the

ground covers were a structure as contemplated by Article V of the Declaration. The

Association also filed the affidavit of its manager, Laurinda Beaver, who stated that only two

other lots in the subdivision had non-approved concrete ground cover, and that the Association

had notified those homeowners that they were in violation of the Declaration. Bains filed a

motion to disregard Beaver’s affidavit, arguing that it contradicted her later deposition testimony

in which she stated she did not know how many lots had non-approved ground cover, but that it

was more than two. The trial court heard the motion for summary judgment, and after receiving

photographs of the ground cover on Bains’s property, granted Bains’s amended motion for

partial summary judgment on the grounds of waiver and inapplicability of the Declaration to

ground cover. The trial court did not rule on Bains’s motion to disregard Laurinda Beaver’s

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affidavit. After the motion for partial summary judgment was granted, an agreed take-nothing

judgment was rendered as to KB Home, and Bains’s third-party action was dismissed with

prejudice. The judgment states that “in light of the court’s granting of a partial summary

judgment on liability issues in favor of Third-Party Plaintiffs, the Bains, and against Plaintiff

Stage Run Owners Association, Inc., a take-nothing judgment should also be entered in favor or

Third-Party Defendant KB Home Lone Star, L.P.”

The parties proceeded to trial on the sole remaining issue of attorney’s fees. The amount

of the fees was stipulated. The trial court awarded $17,500 in attorney’s fees to Bains under the

Declaratory Judgment Act, as well as conditional appellate fees. The trial court rendered a final

and appealable judgment.

The Association now appeals, complaining of the summary judgment and award of

attorney’s fees. Bains filed a notice of cross-appeal, challenging the trial court’s failure to

disregard the affidavit of Laurinda Beaver, and, in the event that any of the Association’s issues

are sustained, the take-nothing judgment as to KB Home.

STANDARD OF REVIEW AND APPLICABLE LAW

A ruling on a traditional motion for summary judgment is subject to de novo review.

Provident Life & Accident Ins. Co. v. Knott, 128 S.W.3d 211, 215 (Tex. 2003). Summary

judgment is appropriate only when there are no disputed issues of material fact and the moving

party is entitled to judgment as a matter of law. Tex. Commerce Bank, N.A. v. Grizzle, 96

S.W.3d 240, 252 (Tex. 2002). Therefore, a traditional motion for summary judgment is properly

granted if the defendant disproves at least one essential element of the plaintiff’s cause of action,

or establishes all essential elements of an affirmative defense. See D. Houston, Inc. v. Love, 92

S.W.3d 450, 454 (Tex. 2002). If the movant is successful in establishing its right to judgment as

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a matter of law, the burden then shifts to the non-movant to produce evidence raising a genuine

issue of material fact. City of Houston v. Clear Creek Basin Auth., 589 S.W.2d 671, 678–79

(Tex. 1979). In reviewing a traditional motion for summary judgment, we resolve every doubt

and indulge every reasonable inference in the nonmovant’s favor. SW Elec. Power Co. v. Grant,

73 S.W.3d 211, 215 (Tex. 2002). All evidence favorable to the nonmovant will be taken as true.

Id.

We review the trial court’s construction of a restrictive covenant de novo. Ski Masters of

Tex., LLC v. Heinemeyer, 269 S.W.3d 662, 667 (Tex. App.—San Antonio 2008, no pet.); Owens

v. Ousey, 241 S.W.3d 124, 129 (Tex. App.—Austin 2007, pet. denied). “[R]estrictive covenants

are subject to the general rules of contract construction.” Pilarcik v. Emmons, 966 S.W.2d 474,

478 (Tex. 1998); see also Sonterra Capital Partners, Ltd. v. Sonterra Prop. Owners Ass’n, Inc.,

216 S.W.3d 417, 420–21 (Tex. App.—San Antonio 2006, no pet.). Covenants are examined as a

whole in light of the circumstances present when the parties entered into the agreement.

Pilarcik, 966 S.W.2d at 478. We give effect to every sentence, clause, and word of a covenant,

and avoid constructions that would render parts of the covenant superfluous or inoperative.

Owens, 241 S.W.3d at 129–30. The reviewing court’s primary intent is to ascertain and give

effect to the true intention of the parties as expressed in the instruments. Id. Restrictive

covenants are liberally construed to effectuate their purposes and intent; however, any doubts are

resolved in favor of the free and unrestricted use of the premises. See TEX. PROP. CODE ANN.

§ 202.003(a) (West 2007); Sonterra Capital Partners, 216 S.W.3d at 420.

Whether a restrictive covenant is ambiguous is a matter of law for the court to decide.

Universal Health Servs., Inc. v. Renaissance Women’s Group, P.A., 121 S.W.3d 742, 746 (Tex.

2003); Pilarcik, 966 S.W.2d at 478. A covenant is unambiguous if, after appropriate rules of

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construction have been applied, the covenant can be given a definite or certain legal meaning.

Pilarcik, 966 S.W.2d at 478; Pitman v. Lightfoot, 937 S.W.2d 496, 517 (Tex. App.—San

Antonio 1996, writ denied) (holding same concerning contracts generally). In contrast, if, after

appropriate rules of construction have been applied, a covenant is susceptible of more than one

reasonable interpretation, the covenant is ambiguous. Pilarcik, 966 S.W.2d at 478. Summary

judgment is improper where a restrictive covenant is ambiguous because the interpretation of an

ambiguous contract is a question of fact for a jury. See Dynamic Publ’g & Distrib. L.L.C. v.

Unitec Indus. Ctr. Prop. Owners Assoc., Inc., 167 S.W.3d 341, 345 (Tex. App.—San Antonio

2005, no pet.). Mere disagreement over a restrictive covenant’s interpretation does not

necessarily render the covenant ambiguous. In re D. Wilson Constr. Co., 196 S.W.3d 774, 781

(Tex. 2006); Hodas v. Scenic Oaks Prop. Ass’n, 21 S.W.3d 524, 528 (Tex. App.—San Antonio

2000, pet. denied).

DISCUSSION

Applicability of Article V of the Declaration

The Association first contends the trial court erred in finding the large areas of concrete

ground cover are not ‘structures’ and thus do not require approval by the ACC. The Texas

Supreme Court has noted that the word ‘structure’ can be used in either a broad or restricted

sense. Stewart v. Welsh, 142 Tex. 314, 178 S.W.2d 506, 508 (1944); see also Voice of the

Cornerstone Church Corp. v. Pizza Prop. Partners, 160 S.W.3d 657, 669 (Tex. App.—Austin

2005, no pet.). The broad definition is: “Any production or piece of work artificially built up, or

composed of parts joined together in some definite manner; any construction.” Stewart, 178

S.W.2d at 508. The restricted definition of ‘structure’ is: “A building of any kind, chiefly a

building of some size or of magnificence; an edifice.” Id. The Association advocates for a broad

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application of the term ‘structure,’ which includes “any construction.” It points to excerpts from

Bains’s deposition, in which he testified that it took about three weeks to erect the ground cover,

which consisted of framing of areas with wooden forms, installation of metal mesh, drilling of

holes into the foundation of the house to tie the ground cover to the house, and pouring and

leveling of concrete. Because Bains admitted to constructing the concrete pads from

components, the Association maintains that they are structures requiring ACC approval.

The Association cites several Texas cases to support its argument that the ground cover is

a structure. Aside from choosing between a broad or narrow definition of ‘structure,’ the cases

all focus on the intent of the drafters when construing the restriction at issue. In Stewart, the

court held that a fence was a structure falling within a restrictive covenant prohibiting a

“structure of any kind” from being built on a utility easement. Stewart, 178 S.W.2d at 507–08.

The Stewart court reached this conclusion after considering the intent of the restrictive covenant,

which was to prevent the construction of a house, building, or other substantial structure on the

utility easement because any such house, building, or other structure would likely interfere with

the free use of the area for the installation and maintenance of water, gas, sewer, light, power and

telephone lines. Id. at 508. Because the fence was seven-feet high and built from rails, pickets,

and posts set in the ground, it constituted a “material obstacle to the use of the reserved area for

its intended purpose.” Id. In DeNina v. Bammell Forest Civic Club, Inc., 712 S.W.2d 195, 198

(Tex. App.—Houston [14th Dist.] 1987, no writ), the appellate court examined whether a

thirteen-foot diameter satellite disc and its poured-cement base violated a provision of a deed

restriction which provided that all subdivision lots must be used for residential purposes and that

no structure could be built or placed on the lot other than a single-family home and a garage. Id.

at 198. The DeNina court held that the satellite disc was not a structure because it was not a

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multi-family residence, and the purpose of the particular deed restriction was to limit residences

within the subdivision to single-family residences. 2 Id. Most recently, the Austin Court of

Appeals held that a baptismal pool violated a restrictive covenant prohibiting “subsurface

structures.” Voice of the Cornerstone Church, 160 S.W.3d at 662, 669. In reaching its decision,

the court considered the entire covenant, which provided that the property was to be used for

“commercial/light industrial” purposes, as well as the fact that the baptismal pool was created by

converting an in-ground petroleum tank into a four-and-a-half feet deep pool with concrete walls

and floor. Id. at 669.

Bains responds that when looking at the restrictive covenant as a whole, it is clear the

drafters did not intend to prohibit concrete ground cover. Relying on the rule expressio unius est

exclusion alterius (the express mention of one thing is tantamount to the exclusion of all others),

Bains infers that because Article V specifically lists 13 items which require ACC approval, yet

does not include a sidewalk or patio, the drafters must have intended to exclude ground cover.

Further, Bains suggests that here the word “structure” refers to something more substantial than

poured concrete and applies to above-ground structures, not ground cover. In support, he points

to Turner v. England, in which the Eastland Court of Appeals held that a concrete tennis court

slab was not a ‘structure’ prohibited by a 50-foot setback line. Turner v. England, 628 S.W.2d

213, 214 n.3, 216 (Tex. App.—Eastland 1982, writ ref’d). Turner noted that there was no

contention that street lights, fences, stone walls, and paved driveways closer than 50 feet to the

street were “structures.” Id. at 215. Bains urges us to strictly construe the restrictive covenant

against the Association, and to resolve any doubts in favor of the free use of the premises.

2 The DeNina court went on to hold that the satellite disc violated another section of the deed restriction prohibiting electrical antenna. Id. at 198-99.

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In construing the restrictive covenant, our primary task is to determine the intent of its

drafters. Wilmoth v. Wilcox, 734 S.W.2d 656, 658 (Tex. 1987). Here, the Declaration states that

it was created for the purpose of “enhancing and protecting the value, desirability and

attractiveness of [the subdivision].” Mindful of this, it is apparent that the drafters of the

Declaration intended to require ACC approval for exterior modifications to the property. Bains

admitted that the ground cover was installed by framing areas with wooden forms, installing

metal mesh, drilling holes into the foundation of the house to tie the ground cover to the house,

and pouring and leveling concrete. Clearly, these actions constitute modifying the exterior of

Bains’s property. Because the concrete ground cover installed by Bains is an exterior

modification, we conclude it falls within Article V of the Declaration. Accordingly, we hold as a

matter of law that the concrete ground cover constructed by Bains is a structure falling within

Article V of the Declaration. Thus, we sustain the Association’s first issue, and reverse the

summary judgment in favor of Bains on this ground.

Waiver

The Association next argues that Bains did not establish his claim of waiver as a matter

of law. In order to establish the affirmative defense of waiver in a deed restriction case, the non-

conforming user must prove that the violations then existing are so great as to lead the mind of

the “average man” to reasonably conclude that the restriction in question has been abandoned

and its enforcement waived. New Jerusalem Baptist Church, Inc. v. City of Houston, 598

S.W.2d 666, 669 (Tex. App.—Houston [14th Dist.] 1980, no writ). Among the factors to be

considered by the “average man” are the number, nature, and severity of the then existing

violations, any prior acts of enforcement of the restriction, and whether it is still possible to

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realize to a substantial degree the benefits intended through the covenant. Id.; Pebble Beach

Prop. Owners’ Ass’n v. Sherer, 2 S.W.3d 283, 290 (Tex. App.—San Antonio 1999, pet. denied).

Bains submitted his affidavit along with photographs of 45 other homes in the Stage Run

subdivision with added concrete ground cover or stone flat work. These photographs alone,

however, cannot establish that the Association waived enforcement of the Declaration. First, it is

unknown whether the additions were made after the houses were purchased from KB Home.

Further, Bains does not provide any information as to whether the owners of these houses

requested ACC approval, nor does he offer any testimony to show that the ACC did not approve

the additions. Even assuming the affidavit of Laurinda Beaver was struck, as Bains argues it

should have been, the photographs do not amount to more than a scintilla of evidence that the

Association waived enforcement of Article V. We conclude Bains failed to conclusively

establish his affirmative defense of waiver as a matter of law. Accordingly, summary judgment

on the ground of waiver was improper. See D. Houston, 92 S.W.3d at 454. Because the award

of attorney’s fees was premised on the granting of summary judgment in Bains’s favor, we also

reverse the award of attorney’s fees. We sustain the Association’s second and third issues,

reverse the summary judgment on the ground of waiver, and remand the cause to the trial court

for further proceedings.

Cross-Appeal: Third Party Action Against KB Home

In his issue on cross-appeal, Bains requests that in the event we remand the cause, we

also reverse and remand the dismissal of his third-party action against KB Home. If a trial is

necessary, Bains plans to assert that any violation of a restrictive covenant was with the express

approval of KB Home and was caused by the false representations to Bains by KB Home’s

superintendent, and to seek damages and indemnity or contribution from KB Home. Since

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Bains’s rights against KB Home derive from the Association’s rights against Bains, Bains claims

a remand of the third-party action is necessary.

The order dismissing KB Home was premised on the granting of summary judgment on

the liability issues in Bains’s favor. Because we are now reversing the order granting partial

summary judgment and remanding the cause to the trial court, we agree that Bains should be

permitted to pursue his claims for indemnity or contribution against KB Home. Accordingly, we

also reverse the dismissal order, and remand the cause to the trial court for further proceedings.

CONCLUSION

Both the order granting partial summary judgment and the order granting attorney’s fees

to Bains are reversed. Additionally, we reverse the order rendering a take-nothing judgment as

to KB Home. The cause is remanded to the trial court for further proceedings.

Phylis J. Speedlin, Justice

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