Opinion
NO. 01-16-00913-CV
05-17-2018
TOWER OAKS COMMUNITY ORGANIZATION, Appellant v. GREGORY D. HAM AND COLIN E. HAM, Appellees
On Appeal from the 61st District Court Harris County, Texas
Trial Court Case No. 2015-52753
MEMORANDUM OPINION
Appellant, Tower Oaks Community Organization ("TOCO"), is an unincorporated non-profit association comprised of eight residents of the Tower Oaks subdivision and formed for the purpose of monitoring the enforcement of restrictive covenants in the subdivision when the Tower Oaks Civic Club fails or refuses to do so. TOCO sued the appellees, Gregory D. and Colin E. Ham ("the Hams"), based on the Hams' alleged violation of the subdivision's restrictive covenants ("Covenants"), and the trial court rendered a take-nothing judgment against TOCO. TOCO argues, in relevant part, that the trial court erred in failing to find that the Hams violated the Covenants' "requirement" of one house per developed lot and, because the Hams allegedly violated this requirement, TOCO is entitled to injunctive relief and attorney's fees as a matter of law. We conclude that TOCO's construction of the Covenants is not supported by their plain language and that the evidence demonstrates, as a matter of law, that TOCO failed to establish that the Hams violated the Covenants. Accordingly, we affirm the trial court's take-nothing judgment.
TOCO asserts seven additional issues concerning other findings made by the trial court regarding the legal effect of the Tower Oaks Civic Club's approval of the Hams' construction and findings relevant to affirmative defenses raised by the Hams. Specifically, TOCO argues that the Tower Oaks Civic Club's erroneous approval of the Hams' construction does not excuse the Hams from complying with the Covenants; Texas Property Code section 202.004(a) does not apply as a matter of law; there is no, or insufficient, evidence that TOCO acted arbitrarily or capriciously; there is no, or insufficient, evidence of laches; there is no, or insufficient, evidence that TOCO was estopped from enforcing the Covenants; and there is no, or insufficient, evidence that the "one house per developed lot" requirement was waived.
The Hams also originally filed a notice of appeal and cross-appeal. However, those claims have since been dismissed.
Background
The Tower Oaks community was originally developed in the 1950s and 1960s. The development included the creation, in 1968, of the Covenants concerning the use of property within the subdivision. The Covenants were to remain in effect initially for a period of fifty years and are automatically extended for ten-year terms following the initial effective period. The Covenants include the following relevant provisions:
3. It is expressly understood that all lots and land in this subdivision shall be known and described as residential lots and property and shall not during the effective dates and periods of this instrument be used or permitted to be used for any other purpose.
4. No more than one single family residential dwelling shall be built on any one lot. . . .
5. No building shall be erected, placed, or altered upon any building plot in this subdivision until the building plans, specifications and plot plans showing the location of such building have been approved in writing by the architectural committee as to quality of workmanship and materials and to conformity and harmony of external design with the existing structures in the subdivision and as to location of the building with respect to topography and finished ground elevation. . . .
. . . .
8. No animals, livestock, poultry, dogs, cats and such may be kept or permitted on the premises, except as pets or for domestic use. . . . In this connection it is further understood that all barns, stables, and outhouses must be placed and so situated that no part of them is closer to the front of said lot than a line parallel to the front property line lying at the rear of the principal dwelling situated on said lot. . . . All such structures and shelters for animals and pets shall conform to the structures in the neighborhood and shall not be maintained in any unsightly manner. . . .
9. No residential structure shall be erected or placed on any lot that has actual living space of less the 1,600 square feet, exclusive of porches and garages.
10. No trailer, basement, tent, shack, garage, barn or other building or outbuilding erected on any lot shall at any time be used for residential purposes, either temporarily or permanently. No structure of whatever character, including the structures built for residential purposes, shall ever be occupied or used for such residential purposes until the same is complete outside. No second-hand houses shall be moved on any lot.
. . . .
13. No building or structure shall be located closer than Fifty feet (50') to the front line of each residential lot or nearer to the side street lines than Twenty-Five feet (25'). Eaves, steps and open porches shall not be considered as part of a building, but this definition shall not permit any portion of a building, including the aforesaid, to encroach upon an adjoining lot, except when two or more adjacent lots are used as one building plot.
. . . .
19. The exterior of all residential structures shall be of at least 2/3 masonry construction and shall be completely and permanently finished, and if any part of such exterior is of wood or of material requiring painting, then same shall be finished. . . .
The Tower Oaks Civic Club generally oversees the enforcement of these Covenants, including by forming an Architectural Committee to approve construction as required by the Covenants. However, the Tower Oaks Civic Club does not impose mandatory membership fees on residents of the community, and thus it has limited resources with which to enforce the Covenants. Accordingly, a group of residents, currently including four married couples who reside in the neighborhood, decided to form TOCO for the purpose of enforcing the Covenants.
On August 29, 2014, the Hams purchased the property located at 11510 Mile Drive in Houston, Texas ("the Property"). The Property was comprised of two lots—Lots 5 and 6. The purchase price was for the combined lots, and the entire Property was conveyed in a single transaction.
In early 2015, the Hams contacted the Tower Oaks Civic Club's Architectural Committee to request permission to build an auxiliary building ("the Building") on Lot 6 of their Property. Their request was considered by the Architectural Committee, which requested that the Hams construct the Building toward the back of the Property and that they construct a privacy fence between the Building and the street. The Hams agreed to these conditions; and the Architectural Committee, and ultimately the Tower Oaks Civic Club Board, approved the Hams' request to construct the Building.
The Architectural Committee informed the Hams by phone of the approval to build in early April 2015, and on April 18, 2015, the Hams entered into a contract with Hawthorne Steel Buildings to construct the Building, paying it one-third of the contract price of $49,747.19 as a deposit. On April 28, 2015, the Hams obtained written approval from the Architectural Committee to build and the construction process began shortly after.
On July 22, 2015, Nancy McCreary, a member of TOCO—an organization the Hams had never heard of or had any dealings with—inquired into the activity on the Hams' property by contacting the Tower Oaks Civic Club's president, Dwayne Harthorn. Harthorn provided the requested information to McCreary and notified a member of the Architectural Committee of their interaction. He expressed a belief that McCreary was "going to go after" the Hams.
On July 23, 2015, the Hams paid $10,265.00 for land clearing services and construction of a foundation pad for the Building. By September 17, 2015, the foundation was complete and the Hams paid another third of the contracted cost for the Building.
On September 18, 2015, TOCO served the Hams with notice of this lawsuit, which had been filed ten days earlier. TOCO's suit against the Hams sought, among other things, injunctive relief compelling the Hams to replat their two lots into one. The Hams testified that, after the filing of the suit, members of TOCO drove past their Property slowly to assess the progress of the construction and to take pictures of their Property. Construction of the Building was completed on October 14, 2015, and the Hams paid the final third of the contracted-for price.
In its live pleading TOCO sought injunctive relief and attorney's fees.
At the bench trial, TOCO presented evidence that it is an unincorporated non-profit association formed under Chapter 252 of the Texas Business Organizations Code. It is comprised of eight members who reside in the Tower Oaks community. Both sides presented evidence establishing the location of the Hams' home and other buildings and structures on their Property, as well as evidence of the procedures the Hams followed to obtain permission from the Tower Oaks Civic Club's Architectural Committee to construct the Building on the Property.
Gregory Ham testified that the way the septic system and well servicing his home on the Property are set up, he could not sell Lot 6 as a separate lot because "[i]t would be very challenging to build a home on lot six" in light of the mandatory offset around the well and the fact that his septic system discharges treated wastewater onto large portions of lot 6. He stated, "In order to live in my property and [in] my house, I have to have wastewater [treatment]; and I have to have water. And those cross the line [between Lot 5 and Lot 6]. Those are—lot six is essential in providing those services to our house."
Gregory Ham further testified that the Building is connected to his residence in the sense that it uses the same water and septic systems. He stated that the Building could be used as a garage, but it is more accurately considered a "utility building." He testified that he uses the Building as a place for his children—who compete in the sport of wrestling—to practice and a place where he and his wife exercise. The Building is also used for storage purposes. Ham testified that no one conducts business from the Building, and he never charges anyone any fees to use the Building.
The parties presented evidence that there are approximately 500 lots in the Tower Oaks subdivision and that approximately 50 of those lots are currently vacant with no buildings on them. The Hams also presented evidence that another homeowner—specifically James Deas, a member of TOCO—has a large metal structure on his lot similar to the one erected by the Hams and that he is operating a commercial operation out of this home in Tower Oaks. The Hams also presented evidence of a few other lots that contain sheds or other similar structures but no residence or dwelling.
The trial court found in favor of the Hams and rendered judgment that TOCO take nothing by its claims. The trial court also signed findings of fact and conclusions of law. The trial court found that the Property "is used as a single building plot comprised of two smaller lots, Lot 5 and Lot 6," that "[t]he Property, although comprised of two lots, is treated as a single property by the Harris County Appraisal District," and that "[t]he Property, although comprised of two lots, has only a single address."
Regarding the use of the Property, the trial court found that:
7. There is a residence on Lot 5 of the Property.
8. The residence on Lot 5 of the Property has septic and well systems attached thereto [that] straddle the lot lines between Lot 5 and Lot 6. The septic system is permanently attached to the Hams' house. . . .
. . . .
12. At the time [the Hams] purchased the Property, a building existed on Lot 6. The building was not a residence. Additionally, there were two other structures—a fence and a concrete driveway—that straddled the lot line between Lot 5 and Lot 6.
The trial court further found that the Covenants for the neighborhood "delineated procedures for Tower Oaks property owners to obtain approval for certain actions that, without approval, would violate the restrictive covenants." And it further made numerous findings that the Hams complied with the procedure set out in the Covenants and other policies governing the Tower Oaks Civic Club and its Architectural Committee. Finally, the trial court found that "[t]he Building is not being used for any commercial purpose" but rather "is being used for a residential purpose." The trial court concluded, among other points, that the Hams "did not violate any provision of the restrictive covenants by building the Building as approved by the Tower Oaks Civic Club as a matter of law."
Restrictive Covenants
In its first issue, TOCO argues that the trial court erred in failing to find that the Hams violated the Covenants' purported requirement of one house per developed lot and, thus, TOCO was entitled to injunctive relief as a matter of law. The Hams argue that their construction of the Building did not violate the Covenants. Because the plain language of the Covenants at issue do not support TOCO's construction, we agree with the Hams.
A. Standard of Review
The restrictions or covenants in this case are restrictive covenants concerning real property. See TEX. PROP. CODE ANN. § 202.001(4) (West 2014) ("'Restrictive covenant' means any covenant, condition, or restriction contained in a dedicatory instrument, whether mandatory, prohibitive, permissive, or administrative."); Elbar Invs., Inc. v. Garden Oaks Maint. Org., 500 S.W.3d 1, 3 (Tex. App.—Houston [1st Dist.] 2016, pet. denied). When interpreting restrictive covenants, we apply the general rules of contract construction. Pilarcik v. Emmons, 966 S.W.2d 474, 478 (Tex. 1998); Garrett v. Sympson, 523 S.W.3d 862, 866 (Tex. App.—Fort Worth 2017, pet. filed); Elbar Invs., Inc., 500 S.W.3d at 3. Our primary task is to determine the drafter's intent from the instrument's language by examining the covenant as a whole in light of the circumstances present when the covenant was made. Pilarcik, 966 S.W.2d at 478; Wilmoth v. Wilcox, 734 S.W.2d 656, 658 (Tex. 1987); Garrett, 523 S.W.3d at 866.
We must construe restrictive covenants as a whole, 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 v. Ousey, 241 S.W.3d 124, 130 (Tex. App.—Austin 2007, pet. denied) (citing City of San Antonio v. City of Boerne, 111 S.W.3d 22, 29 (Tex. 2003)). Words used in a restrictive covenant may not be enlarged, extended, stretched, or changed by construction; words and phrases used in the covenant must be given their commonly accepted meaning. Wilmoth, 734 S.W.2d at 657-58; Garrett, 523 S.W.3d at 866; Dyegard Land P'ship v. Hoover, 39 S.W.3d 300, 308 (Tex. App.—Fort Worth 2001, no pet.).
If a restrictive covenant can be given definite legal meaning, it is unambiguous and should be construed liberally to effectuate its intent. See TEX. PROP. CODE ANN. § 202.003(a) (West 2014); Garrett, 523 S.W.3d at 866; Jennings v. Bindseil, 258 S.W.3d 190, 195 (Tex. App.—Austin 2008, no pet.). However, when a restrictive covenant may reasonably be interpreted in more than one way, it is ambiguous, and we will resolve all doubts in favor of the free and unrestricted use of the property, strictly construing any ambiguity against the party seeking to enforce the restriction. See Wilmoth, 734 S.W.2d at 657; Garrett, 523 S.W.3d at 866; Dyegard Land P'ship, 39 S.W.3d at 308-09; see also Elbar Invs., Inc., 500 S.W.3d at 3 (holding that, at common law, covenants restricting free use of land are not favored but will be enforced when they are confined to lawful purposes and are unambiguous). The party seeking to enforce a restrictive covenant has the burden of showing that the restriction is valid and enforceable. Garrett, 523 S.W.3d at 866; Gillebaard v. Bayview Acres Ass'n, Inc., 263 S.W.3d 342, 347 (Tex. App.—Houston [1st Dist.] 2007, pet. denied).
We review the construction of restrictive covenants de novo. Landing Cmty. Improvement Assoc., Inc. v. Young, No. 01-15-00816-CV, 2017 WL 3910893, at *18 (Tex. App.—Houston [1st Dist.] Sept. 7, 2017, no pet. h.) (mem. op.); Uptegraph v. Sandalwood Civic Club, 312 S.W.3d 918, 925 (Tex. App.—Houston [1st Dist.] 2010, no pet.); Owens, 241 S.W.3d at 129.
B. Analysis
TOCO asserts that the Covenants require that each developed lot must contain a house and that "an owner of two adjoining lots cannot use a house on one lot to justify non-residential use of the second lot, even if an outbuilding or other facility . . . could have been placed on the first lot." This interpretation ignores the plain language of the Covenants.
TOCO argues that Covenant 3 "requires a house." However, the plain language of Covenant 3 does not provide restrictions regarding the type or number of structures that may be built on a lot. Rather, Covenant 3 states,
It is expressly understood that all lots and land in this subdivision shall be known and described as residential lots and property shall not during the effective dates and periods of this instrument be used or permitted to be used for any other purpose.Thus, by its plain language, Covenant 3 states only that the use of the lots and property shall be "residential." Other Covenants address the specifications for any structures erected in the subdivision. See Pilarcik, 966 S.W.2d at 478 (we must determine drafter's intent from instrument's language by examining entire covenant in light of circumstances present when it was made); Wilmoth, 734 S.W.2d at 657-58 (words used in restrictive covenant may not be enlarged, extended, stretched, or changed by construction; words and phrases must be given their commonly accepted meaning).
Covenant 4 provides that "[n]o more than one single family residential dwelling shall be built on any one lot. . . ." (Emphasis added). By its plain language, this Covenant would prohibit the construction of two or more "single family residential dwellings." It is undisputed that the Hams' Property contains only one such dwelling. Thus, there is no evidence that the Hams violated either Covenant 3 or Covenant 4 when they constructed their Building.
TOCO also argues that Covenants 9, 10, and 19 "carefully specify characteristics for a building to be a 'residential structure.'" Covenant 9 requires that residential structures contain at least 1,600 square feet of living space; Covenant 10 provides that no shacks, barns, or other outbuildings may be used as a residence; and Covenant 19 specifies the types of materials that may be used on the exteriors of residential structures. By their plain language, none of the Covenants address whether or where the Hams could construct the Building on the Property. The Building is not a residential structure, so Covenants 9 and 19 do not apply to it. Covenant 10 clearly contemplates the construction of outbuildings such as the Hams' Building, and it requires that they not be used as a residence. The Hams do not use their Building as a residence—the evidence indicates that they dwell in their home, also built on the Property, and use the Building for various "residential" (as opposed to commercial) purposes such as exercise and storage. See Pilarcik, 966 S.W.2d at 478; Wilmoth, 734 S.W.2d at 658; see also Owens, 241 S.W.3d at 130 (courts must construe restrictive covenants as whole, give effect to every sentence, clause, and word, and avoid constructions that would render parts of covenant superfluous or inoperative).
TOCO further argues that Covenant 8 requires a house on each developed lot. Covenant 8 addresses property owners' ability to keep certain types of animals on the property and provides, "In this connection it is further understood that all barns, stables, and outhouses must be placed and so situated that no part of them is closer to the front of said lot than a line parallel to the front property line lying at the rear of the principal dwelling situated on said lot." TOCO asserts that this language "necessarily requires that there must be a principal dwelling on the very lot ('said lot') on which an outbuilding is situated" and that the Hams' residence located primarily on Lot 5 cannot fulfill these requirements.
Contrary to TOCO's interpretation, and assuming without deciding that this Covenant applies to a structure like the Hams' Building that was not built in "connection" with owning animals, nothing in the Covenant indicates that the language "principal dwelling situated on said lot" was intended as a prohibition against landowners, like the Hams, combining two contiguous lots for purposes of determining where they may build their outbuildings.
TOCO asserts that "[t]o treat Lot 5 and Lot 6 as united, merely because the Hams own both, would upend settled Texas law." TOCO effectively argues that because the Hams have not formally re-platted Lot 5 and Lot 6 into a single lot, they cannot be considered as a single lot for purposes of applying the Covenants. However, provisions within the Covenants indicate that using adjacent lots as one "building plot" was contemplated at the time the Covenants were created. Covenant 13 provides set-back requirements and states that no portion of a building, "including the aforesaid [eaves, steps, and open porches], [may] encroach upon an adjoining lot, except when two or more adjacent lots are used as one building plot." Nothing in the Covenants requires formal re-platting of lots used as one building plot, as TOCO seeks here. And the record contains ample evidence that the Hams—and indeed, the prior owners—used two adjacent lots as one building plot. The Hams paid one price for the entire Property, which had one address and was conveyed to them in a single transaction. At the time the Hams purchased the Property, the residence was located primarily on Lot 5, but portions of the well, septic system, driveway, and fence occupied parts of Lot 6 and an outbuilding already existed on Lot 6.
TOCO cites Sharpstown Civic Association, Inc. v. Pickett, Wade v. Magee, and Finkelstein v. Southampton Civic Club to support its argument that treating Lots 5 and 6 as united would "upend settled Texas law," but these cases are distinguishable from the present case.
In Sharpstown, the Texas Supreme Court considered whether a restrictive covenant prohibiting commercial use of land could be used to prevent a landowner from using two contiguous plots of land as a carwash. 679 S.W.2d 956, 958 (Tex. 1984). The landowner, Pickett, argued that one of the plots of land had been used for commercial purposes—as an office—for several years and, thus, the Civic Association had effectively waived its right to enforce the covenant against commercial use as to both plots of land. Id. The supreme court determined that there was no evidence of use of the second lot—which was an empty lot that was infrequently mowed and used only occasionally for parking of one or more vehicles—for non-residential purposes and thus his waiver argument was inapplicable as to that lot. Id. The court went on to reject Pickett's waiver argument regarding the first lot on the basis that the Association's failure to seek enforcement of the covenants against commercial use when it was used as an office did not waive the Association's right to enforce the covenant against the proposed carwash or other more significant development. Id.
The covenants in Sharpstown involved the general use of the property for commercial purposes, not the construction of purely residential-use improvements such as the Building at issue here. It also involved the issue of waiver, which is not relevant to our construction of the Covenants in this case. Sharpstown is inapplicable.
In Finkelstein v. Southampton Civic Club, this Court considered whether "a residential corner lot owner . . . may subdivide an original corner lot into two smaller residential lots, only one of which thereafter abuts the front street, so that the existing improvements on each of the resulting smaller lots may thereafter be used as separate single family dwellings." 675 S.W.2d 271, 272 (Tex. App.—Houston [1st Dist.] 1984, writ ref'd n.r.e.). This, too, is a materially different issue from the one presented in this case. Finkelstein construed covenants involving "fronting and entrance direction requirements," the requirement that easements be reserved in deeds, and a prohibition against "multiple housing" that are unrelated to any issue in this case. Id. at 275. Thus, Finkelstein is inapplicable.
Finally, in Wade v. Magee, the El Paso Court of Appeals considered a restrictive covenant requiring that garages and carports constructed on corner lots have "side or rear entrances thereto." 641 S.W.2d 321, 322 (Tex. App.—El Paso 1982, writ ref'd n.r.e.). The landowners owned Lot 6, which was a corner lot, and a portion of Lot 5, which was not, and they sought to build a garage on Lot 5. Id. The El Paso Court held that the restrictive covenant regarding garages built on corner lots did not apply to their garage on Lot 5. Id. (stating that court was "bound by those holdings that restrictive covenants are to be construed strictly against the person seeking to enforce them, and that all doubts must be resolved in favor of the free and unrestricted use of one's property") (citing Baker v. Henderson, 153 S.W.2d 465, 470 (Tex. 1941)). The language and purpose of the covenant at issue in Wade is again materially different from the Covenants at issue here, and Wade, like Sharpstown and Finkelstein, is inapplicable.
None of the cases cited by TOCO involve a situation analogous to the present case. Here, TOCO asserts that the Covenants require a residential dwelling on each developed lot, but nothing in the Covenants themselves supports this assertion. See Pilarcik, 966 S.W.2d at 478; Wilmoth, 734 S.W.2d at 658; Owens, 241 S.W.3d at 130. Rather, the Covenants provide that the lots and property must be "residential," that they may not be used "for any other purpose," and that there be "no more than one" residential dwelling on any one lot. The Covenants contemplate adjoining lots of land being used as a single "building plot," as with the Property owned by the Hams, but make no requirement of formal re-platting to do so. The Covenants also set out requirements for various structures built in the subdivision and a process for obtaining approval from the Tower Oaks Civic Club's Architectural Committee, with which the Hams complied.
Accordingly, we conclude, as the trial court did, that, as a matter of law, TOCO failed to establish that the Hams violated any provision of the Covenants by constructing the Building. And because TOCO did not prevail on its claim against the Hams, it was not entitled to attorney's fees. See TEX. PROP. CODE ANN. § 5.006 (West 2014) ("In an action based on breach of a restrictive covenant pertaining to real property, the court shall allow to a prevailing party who asserted the action reasonable attorney's fees in addition to the party's costs and claim.") (emphasis added). Thus, the rendition of a take-nothing judgment against TOCO was proper. See, e.g., Rosemond v. Al-Lahiq, 331 S.W.3d 764, 766 (Tex. 2011) (per curiam) (holding that we affirm judgment if it can be upheld on any legal theory that finds support in evidence).
Because the trial court's judgment is supported by the conclusion that TOCO failed to establish that the Hams violated the Covenants, we need not address the parties' remaining issues regarding additional findings and conclusions made by the trial court. See TEX. R. APP. P. 47.1.
Conclusion
We affirm the judgment of the trial court.
Evelyn V. Keyes
Justice Panel consists of Justices Keyes, Brown, and Lloyd.