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Heblen Kanan, Pharr Plantation v. Plantation Homeowner's

April 25, 2013

HEBLEN KANAN, PHARR PLANTATION, INC., AND PHARR PLANTATION MANAGEMENT CO., LTD., APPELLANTS,
v.
PLANTATION HOMEOWNER'S ASSOCIATION INC., ET AL., APPELLEES.



On appeal from the County Court at Law No. 1 of Hidalgo County, Texas.

The opinion of the court was delivered by: Chief Justice Valdez

OPINION

Before Chief Justice Valdez and Justices Rodriguez and Garza

Opinion by Chief Justice Valdez

Appellants, Heblen Kanan, Pharr Plantation, Inc., and Pharr Plantation Management Co., Ltd., have appealed a judgment rendered on March 29, 2011, in trial court cause number CL-07-0468-A in the County Court at Law Number One of Hidalgo County, Texas. By one issue with multiple sub-issues, appellants contend that the trial court erred in entering judgment on an unenforceable settlement agreement. We affirm.*fn1

I.BACKGROUND

The underlying lawsuit involves a dispute over ownership and management of the Plantation South Subdivision in Hidalgo County, Texas. Pharr Plantation, Inc. ("Plantation"), as owner of the subdivision, and Pharr Plantation Management Co. ("Management"), as manager of the subdivision, brought a suit for declaratory relief against Pharr Plantation Homeowners Association, Inc. and individual property owners*fn2

(collectively "Homeowners") in the subdivision. Plantation alleged that it had sole authority and power to manage the subdivision through Management as opposed to the Homeowners. In their pleadings, Plantation and Management sought declaratory and injunctive relief, damages and exemplary damages, and to remove the cloud on title and to quiet title.

In response, Homeowners filed a counterclaim against Plantation and Management and a third party petition against Heblen Kanan, whom Homeowners alleged was the "alter ego" of Plantation and Management. The Homeowners alleged that Plantation, Management, and Kanan breached their duty to manage the subdivision and collect assessments and brought suit against them for negligence, breach of fiduciary duty, breach of the duty of good faith and fair dealing, fraud, mismanagement, conversion, and for failing to enforce restrictive covenants and the subdivision's rules and regulations. They sought declaratory and injunctive relief and damages. The specific issues between the parties generally concerned who had the right to manage the subdivision, collect assessments from homeowners, and exercise control over common areas such as the subdivision's recreation room and ballroom.

On February 1, 2011, the trial on the merits began. Appellants presented their case for approximately five days. On February 8, 2011, the parties recessed the trial, excused the jury, and orally stated a settlement agreement on the record before the trial court. The reporter's record shows the following:

THE COURT: All right. I understand that you have pretty much resolved all issues with the exception of one issue that is still outstanding.

Now, do you want to just tell the Court -

COUNSEL FOR APPELLANTS: That is correct.

THE COURT: -which that issue is so that I can make a determination on that issue?

COUNSEL FOR APPELLEES: Yes, [y]our Honor. Mr. Kanan, as he testified, and Michelle Huebe *fn3 -they testified there are seven lots where either they or their family members live that are not paying assessments, and we have agreed that we, as the homeowners association, will waive any past due assessments that may be owed on those seven lots. But the disagreement is we want them to start paying assessments beginning March 1st, and Mr. Mancias' clients want to not pay assessments until three years from now.

COUNSEL FOR APPELLANTS: That is the disagreement, Judge.

THE COURT: That is the disagreement, and that is more of a legal issue that the Court would have to address -

COUNSEL FOR APPELLANTS: It is.

THE COURT: - as to the payment of those - of these seven lots? COUNSEL FOR APPELLANTS: Yes.

THE COURT: All right. And that is what is basically keeping it from getting resolved?

COUNSEL FOR APPELLEES: I think so, Your Honor.

THE COURT: All right. I will make a decision on that, and then just all other matters being resolved I will make a decision on this and the case will be over and done with. . . . .

THE COURT: All right. Ladies and gentlemen, it is my understanding that there is an agreement with the exception of one issue that I am going to make a decision on right now. I will allow your attorney . . . to read it into the record as far as the agreement so that we can have it on the record, and then this case should be over and done with. . . . .

THE COURT: All right. The issue with respect to the seven lots - the plaintiff is offering to pay until three years from now and the defendants want it to be paid immediately. The decision of the Court will be that he start[s] paying in one year and a half. All right. So he does not get what he wants. You know, it is halfway. In one ...


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