REAL PROPERTY
SPRING 2020
Teal
Trading and Development, LP v. Champee Springs
Ranchers Property Owners Association, 2020
W.L. 499243; Lexis 45 (Tex. 2020)
Restrictive Easements: In 1998, Cop purchased 9,246 acres
of land. Cop platted the land as a residential development and called it Champee Springs Ranches. In addition to the plat, Cop
signed and recorded restrictions. Among the restrictions is the disputed
easement, which largely restricts private access to a main entrance.Later that year, Cop sold a portion of the
land. The new buyers platted the acreage as Privilege Creek Ranches. Teal now
owns this parcel.
In 1999, the Champee
Springs landowners’ replatted their acreage,
subdividing their existing interior lots. The replat was filed in the public records, but did not list the disputed restrictive easement.
The record further noted non-access easements are not allowed unless they are
dedicated to the county.Teal’s
predecessor-in-title, BTEX Ranch, LP, purchased the Privilege Creek acreage and
an adjoining 1,173 acres. This resulted in the restrictive easement bisecting
the contiguous parcels. BTEX attempted to develop both tracts as one
residential subdivision and built a private construction road in violation of
the restrictive easement. After Champee Springs
Ranches Property Owners Association filed suit against BTEX seeking to enforce
the easement, Teal acquired BTEX’s land through foreclosure and intervened in
the lawsuit.
Held: The Supreme Court reviewed Teal’s
assertion that the omission of the restrictive easement from the public records
in the filing of the replat terminated the easement and relinquished Champee Springs’ right to enforce it. The Supreme Court
held that Champee Springs had standing to sue, and did not relinquish the easement.
Teal further asserted that
restrictive easements violate public policy. The Supreme Court stated, “When
restrictive covenants are confined to a lawful purpose and are clearly worded,
they will be enforced.” The Court affirmed the lower courts holding that
enforced the easement, ruling that the easement burdens Teal’s property.
Copano Energy LLC, et al. v. Bujnoch,
2020
W.L. 499765; Lexis 49 (Tex. 2020)
Statute of Frauds-Emails: In December 2012, Copano approached Bujnochs about
obtaining an easement to construct a pipeline on their properties.
Representatives for each company exchanged emails negotiating the terms of the
easement.
Copano began merging with Kinder Morgan. Copano representatives, other than those involved in the
email negotiations, made written offers to Bujnochs
for far less than had been negotiated. The Bujnochs
brought a breach of contract action against Kinder Morgan and Copano.
Held: The Supreme Court reasoned that
emails could conceivably be used to supply the essential terms if another
writing confirmed that the parties later agreed to the terms stated in the
emails. The emails must be carefully examined to determine whether it truly
evidences the grave intent to be legally bound. Here, the verbiage of the
emails does not reflect an intent to bind Copano to
the easement terms stated in the email. As a result, under the statute of
frauds, the proffered contract is not enforceable.
Roddy v. Holly Lake
Ranch Ass’n, 589 S.W.3d 336 (Tex. App.—Tyler 2019)
Deed Restrictions: Holly Lake Ranch Association (HLRA),
a homeowner’s association for several subdivisions, filed suit against nine property
owners. The trial court rendered a declaratory judgment that (1) the amendments
to the deed restrictions at issue are void and of no further legal effect and
(2) votes cast by members of the Holly Lake Ranch subdivision members in the
future will be allocated as follows” “each member who owns a lot is entitled to
one vote, regardless of how many lots that member owns.” The trial court also
awarded attorney fees to HLRA. The nine homeowner’s
appealed.
Held: The Appeals Court concluded that
the restrictive covenant unambiguously states that vote allotment on an
amendment to the deed restrictions is based on the number of lots, and each lot
is allotted one vote.
One of the amendments at issue
vested the members with a majority vote before the HLRA may levy any
assessments, fees, or dues. The Court looked to the bylaws of HLRA to conclude
that the amendments to the deed restrictions were illegal, using the ordinary
meaning.
The second amendment at issue
required the HLRA to provide a mandatory waiver of duplicate fees, and/or dues
to owners who own more than one lot. The Court held that this amendment
undermined the authority of the board of directors by dispossessing it of their
authority to waive duplicate fees to multi-lot owners at their discretion.
The third amendment restricted
liens on the property to cover approved assessments, fees, or dues. The Court
held that this restriction runs afoul of the corporate bylaws, the management
authority of the board of directors and the voting rights of the members. The
homeowners contended that the award of attorney’s fees were
inequitable and unjust due to the HLRA only joining nine homeowners who filed
the amended deed restriction in the public records despite the hundreds of
property owners that approved the amendments. The Court remanded the case for
the trial court to determine the issue.
Houston Cmty. College
Sys. v. HV BTW, LP, 589 S.W.3d 204 (Tex. App.—Houston [14th Dist.] 2019)
Breach of Contract-Easement: In 2013, HV BTW, LP (the
Partnership) approached Houston Community College (HCC) about obtaining an
easement on a vacant lot adjacent to their commercial building. HCC agreed to
grant the easement and the chancellor signed on behalf of HCC. As consideration
for the easement, the Partnership agreed to construct the parking facility on the
vacant lot at its sole cost and expense. Following the agreement, the
chancellor left HCC. The Partnership allegedly spent $500,000 towards the
construction and only lacked paving the road and striping the parking lot. To
do the paving work, the Partnership needed approval from CenterPoint Energy,
which had a utility easement on the vacant lot. To obtain approval, the
Partnership submitted a consent form to HCC. HCC refused to sign unless the
Partnership agreed to a license agreement instead of an easement.
The Partnership filed a lawsuit
against HCC alleging breach of contract and sought a declaration that the
Partnership has an easement on the vacant lot. The trial court granted summary
judgment and ordered HCC to file an executed easement agreement in the real
property records. The trial court also declared that the Partnership has an
easement on the vacant lot and awarded attorney’s fees. Held: The Court
of Appeals reversed.
HCC alleged that as a public
community college, a political subdivision of the state, the college is
protected by governmental immunity. The court found that under a contract for
services the legislature waived governmental immunity. Here, the parking lot
was a service to HCC from the Partnership.
HCC further alleged that the easement
agreement was not properly executed under local government chapter 271 because
HCC’s board of trustees did not approve the agreement. Under the chancellor’s
authority delegated by the board, the chancellor could award contract up to a
certain dollar amount, and could grant contracts that
were not real property. The board policies excluded easements under the real
property provisions. The court remanded the issue to the trial court to
determine the dollar value of the easement.
Schear Hampton Drywall, LLC v. Founders Comm. Ltd.,
586 S.W.3d 80 (Tex. App.— Houston [14th Dist.] 2019)
Mechanic’s Lien-Foreclosure: Founders entered into general
contract with Construction Supervisors, Inc., for the construction of a senior
living residential project known as The Abbey.
Construction Supervisors entered into a subcontract for completion of the brick and
stucco work on The Abbey. The original subcontractor walked of the job and Schear Hampton served as a substitute for a price increase
of $155,967. Construction Supervisors, the general contractor, notified
Founders that it could not comply with the general contract due to financial
reasons. Founders agreed to pay Schear Hampton
directly and let Construction Supervisors manage the project. After failure to
receive payment for work completed on The Abbey, Schear
Hampton filed a mechanic’s lien in the amount of $152,173.60. Following the
lien Schear Hampton filed a lawsuit to foreclose on
the lien.
The trial court entered a judgment
offsetting the amount of damages awarded to Founders under their contract with
Construction Supervisors. The Texas Property Code section 53.153(b) provides in
pertinent part: “if the suit results in judgment on the lien against the owner
or the owner’s property, the owner is entitled to deduct the amount of the
judgment and costs from any amount due…” Held: The Court held that
Founders was entitled to an offset, despite Schear
Hamptons contention that the Texas Property Code does not expressly allow for
such an offset.
Melton v. CU Members Mortgage,
586 S.W.3d (Tex. App.—Austin 2019)
No Right of Foreclosure-
Constitutional Prohibition: Melton
purchased a leasehold estate interest from the City of San Angelo. The
leasehold is Melton’s homestead. Melton made annual payments on the leasehold.
In 2009, Melton refinanced an existing note on the property by taking out a
home equity loan from Colonial. Melton executed a Texas Home Equity Note and a
Texas Home Equity Security Instrument securing a $223,648 lien on the
leasehold. Melton stopped paying on the note in February 2013.
Melton filed a lawsuit against the
appraiser on the fourth anniversary of the day he signed the loan documents,
asserting that the loan was not eligible for foreclosure based on provisions of
Article XVI, section 50 of the Texas Constitution. Melton alleged that the loan exceeds the
constitutional limit for a foreclosure eligible loan. Texas Constitution
Article XVI, Section 50(a)(6)(B) limits the amount of foreclosure eligible debt
on a homestead to 80 percent of the fair market value of the homestead on the
date the extension of credit is made.
Melton filed a declaration that the
appraisal of his property was too high because the appraiser failed to take into account damage to the home and repairs to correct
the damage. This declaration conflicted with the sworn testimony he previously
gave acknowledging the fair market value of the homestead of $300,000. The
trial court concluded that his declaration was a sham affidavit and excluded
the evidence. Held: The court of appeals affirmed the trail court’s conclusion.
Melton argued that the loan failed
to take into account an existing encumbrance of about
$70,000. However, Colonial’s corporate representative explained that the lender
would pay off the $70,000 and the remaining outstanding debt against the
homestead would be the $223,648 loan. Thus, the $70,000 did not count towards
the constitution’s 80% cap. Melton alleged that the lender failed to provide
him with copies of the loan documents executed by both parties and therefore it
violated the constitution. While Melton did not receive executed copies at the
time of closing, the lender provided the documents within four weeks of
closing. The constitution provides a cure provision allowing the lender to
comply within 60 days of closing. The lender became compliant before the 60th
day.
Schmidt v. Crawford, 584 S.W.3d
640 (Tex. App.—Houston [1st Dist.] 2019)
Citizens Participation Act: Schmidt and Greenbrier had hundreds
of deeds of trust signed by homeowners to pledge their homes as security for
bail bonds loans. These deeds of trust were filed in the public records. S&G
moved to dismiss the plaintiffs’ claim for fraudulently altered deeds under the
Citizens Participation Act. This Act provides a summary procedure in which a
party may move for dismissal on the basis that the claims made against it are based
on, relate to, or are in response to the exercise of the right of free speech,
right to petition, or right of association.
The statute provides that the
exercise of free-speech right is defined as a communication made in connection
with a matter of public concern. The deeds filed in the public records were
within the scope of the Act. Held: The trial court correctly dismissed the claim
for fraudulently altered deeds.
Even though Schmidt and Greenbrier
secured a written disavowal of homestead status from the plaintiffs, this does
not affect the constitutional invalidity of the homestead liens. The
plaintiffs’ actions to quiet title and for declaration that the liens were
invalid were remanded to the trial court.
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