Wheelbarger v. Landing Council of Co-Owners

471 S.W.3d 875, 2015 Tex. App. LEXIS 7952, 2015 WL 4591962
CourtCourt of Appeals of Texas
DecidedJuly 30, 2015
DocketNO. 01-13-00619-CV
StatusPublished
Cited by20 cases

This text of 471 S.W.3d 875 (Wheelbarger v. Landing Council of Co-Owners) 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
Wheelbarger v. Landing Council of Co-Owners, 471 S.W.3d 875, 2015 Tex. App. LEXIS 7952, 2015 WL 4591962 (Tex. Ct. App. 2015).

Opinion

OPINION

Michael Massengale, Justice

After Hurricane Ike caused significant damage to their homes, a group of condominium owners sued their condominium association and members of its board. The plaintiff owners argued that by failing to repair hurricane damage to the condominium complex and by demolishing it, the association acted negligently, breached the association’s declarations and bylaws, and violated the Texas Property Code. The trial court granted directed verdicts on the claims against the individual board members and denied requests for declaratory relief. After a trial on the remaining claims, a jury returned a verdict for the plaintiffs. Pursuant to the plaintiffs’ elec[881]*881tion, the trial court entered judgment in their favor on their contract claims. The plaintiff owners now appeal the dismissal of their claims against the individual board members, while the association cross-appeals the judgment against it. Finding no error, we affirm.

Background

The Landing was a condominium complex in the City of El Lago, Texas. Built in 1969, it consisted of 17 buildings and approximately 156’ condominium units. The Landing occupied approximately seven acres of waterfront property along Clear Lake, and it featured a marina. Many of the units at the Landing had boat slips.

The formative document for The Landing was a condominium declaration which provided that an association, the Landing Council of Co-Owners, would govern and control the affairs of the complex. The Council’s responsibilities included decisions such as whether and how to make improvements or repairs to common areas and features, as well as any possible decision to terminate the condominium development and partition or sell the property. The membership of the Council consisted of all owners of condominium units in The Landing, although the affairs of the Council were directed or managed by a Board of Administrators consisting of seven members. The Council also was governed by a set of bylaws.

In September 2008, Hurricane Ike made landfall near Galveston Island, bringing high winds and flooding to the area, including the City of El Lago. The Landing sustained significant damage. Large quantities of debris washed or blew into the parking lot and marina, and multiple buildings suffered interior and exterior damage. Several buildings suffered some degree of structural damage. The storm also knocked out power throughout much of the area, including power lines to the complex. The Landing’s electrical power had-come in through a single, common line, and it proved impossible to restore power' on a building-by-building -basis. ■Power was never restored to the complex.

Because The Landing’s buildings sat at a lower elevation than the city sewer lines, pumps were used to lift wastewater to the level of the sewer lines. Without power, the pumps could not function. But the water supply to' The Landing remained active, so sewage began' flowing back through the pumps and out into Clear Lake. To prevent this, the water was also turned off on the day after the storm. Because the power was never restored, water and sewer services to the Landing also were never restored.

In accordance with Article 12 of The Landing’s declaration, the. Council asked its property management committee to mail out notices of a meeting to discuss repairs to the complex. In the event that “any part of the condominium Property shall be damaged by casualty,” Article 12 provided rules for determining “whether or not it shall be reconstructed or repaired'...”’ Those rules required the Board of the Council to call a meeting within 15 days of the casualty’s occurrence by written notice, to be delivered either personally or by certified mail, return receipt requested. The meeting itself had to occur not less -than 15 days nor more than 40 days after the casualty. At the meeting, the Council members would vote to determine whether the “required construction [to repair or rebuild the property] comprises- the whole or more than two-thirds (2/3) of the Condominium Project.” •If the Council voted that “reconstruction is required for the whole or more than 2/3 of the Condominium Project,” then the Board was required to pay out all insurance pro[882]*882ceeds and the condominium development would be terminated, unless the co-owners unanimously’agreed to reconstruct and repair all portions of the damaged property. If the Council voted that the damage comprised less than two-thirds of the property, then the Board was required to proceed with reconstruction and repair.

The property management company tasked by the Council with sending out notices of the Article 12 meeting failed to send them by certified mail, return .-receipt requested. Co-owners of the Landing reported to the Board that they had not received their, .notices. According to Tom Jenkins, a Board Administrator, the Board did not learn of the incorrect mailing until after the 15-day period for calling the meeting had expired. Meanwhile, the postal service returned approximately 40% of the notices as undeliverable. The Board then consulted an attorney and canceled the Article 12 meeting.

In July 2009, Richard Smith, the Building Official of the City of El Lago, determined that The Landing had “been damaged or destroyed to. an extent of more than fifty-one (51) percent of its fair market value by the hurricane.” As a result, under the City’s zoning ordinance, The Landing could be repaired only if it were brought into compliance with the City’s building codes.

The Board attempted to call another Article 12 meeting in October 2009, but a group of unit owners calling itself the “Concerned Owners of The Landing Condominiums” objected on the grounds that the deadline for calling such a meeting had passed. The Concerned Owners ultimately obtained a declaratory judgment that the proposed meeting-was untimely.

In March 2010, the Board convened a meeting -under Article 10, whereby two-thirds of the owners could approve alterations or improvements to commonly-owned elements of the Landing. Failing such approval, only those owners consenting to the alterations or improvements would be obliged to pay for them. At the meeting, a majority of the Landing eoowners voted not to alter or improve the property.

After a hearing on April 26, 2010, the City determined that The Landing’s building's constituted substandard housing and a public nuisance. The Council was ordered to apply within 30 days for either a permit to repair the property or a permit to demolish it. If the Council elected .to repair the property, it was to include “explicit details and assurances” that it would bring the property into compliance with existing codes. Some of the co-owners of The Landing sought to challenge that determination by appealing to Smith and to the mayor of the City of El Lago. The City responded that no order, decision, or other determination had been made from which an appeal could be taken; such an appeal would 'be possible only after The Landing sought -a permit to repair or rebuild.

In late 2010, a fire caused further damage to the Landing. Four buildings , were damaged directly by the fire. The Board called another meeting after the fire, this time under both Article 12 and Article 13, which governs termination of the condominium development. At the meeting, approximately 59.5% of the co-owners voted not to répair or reconstruct the property.

Ultimately, the Council obtained a demolition permit from the City of El Lago, and The Landing was demolished in April 2011.

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Bluebook (online)
471 S.W.3d 875, 2015 Tex. App. LEXIS 7952, 2015 WL 4591962, Counsel Stack Legal Research, https://law.counselstack.com/opinion/wheelbarger-v-landing-council-of-co-owners-texapp-2015.