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Western Hills Harbor Owners Association v. Baker

Court of Appeals of Texas, Eighth District, El Paso

March 22, 2017

WESTERN HILLS HARBOR OWNERS ASSOCIATION, Appellant,
v.
TODD BAKER, GEORGE JOSEPH, and Wife, EVELYN JOSEPH, CHARLES JOHNSON, CHARLES MICHAEL PROPERTIES, INC., and MICHAEL SHERMAN, Appellees.

         Appeal from the 355th District Court of Hood County, Texas (TC# 2014102).

          Before McClure, C.J., Rodriguez, and Hughes, JJ.

          OPINION

          YVONNE T. RODRIGUEZ, Justice

         Appellees are property owners in a residential subdivision who claim Western Hills Harbor Homeowners Association has been improperly collecting assessments based on an invalid amendment to the subdivision's original restrictive covenants. The trial court granted summary judgment for the Appellees declaring the amendment void and awarding Appellees damages for the improperly-imposed assessments. The Association appeals contending that a fact issue remains on the amendment's validity and that the trial court therefore erred in granting summary judgment. Finding no error, we affirm.[1]

         BACKGROUND

         Appellees (the "Lot Owners") own various lots in the Western Hills Harbor Subdivision, a residential subdivision in Granbury, Texas. The parties agree that the subdivision is governed by a document entitled "Subdivision Restrictions" (the "Declaration") which was filed in the Hood County deed records in June 1969. The Declaration provides for monthly assessments of $1.50 per lot on single-lot owners, and $1 per lot on multiple-lot owners, not to exceed $4 per month. The Declaration states that these assessments were for the construction of "swimming pools, parks, roads and other improvements" in the subdivision, and that those improvements were "for the sole use and benefit of the members of said Association and their families."

         The Lot Owners sued the Association alleging that on October 21, 2013, the Association had filed an amendment to the Declaration, which was purportedly adopted in November 1996, raising the assessments by adding a $15 annual fee for each lot owned in the subdivision, as well as a $120 annual fee for rental properties "per rented house." The Lot Owners sought a declaration that the 1996 Amendment was not properly adopted and was therefore "void and invalid, " and further sought damages based on the additional assessments the Association had improperly collected in violation of the original Declaration.

         The Summary Judgment Motions

         The Lot Owners filed a motion for partial summary judgment arguing they were entitled to judgment as a matter of law on their claim for declaratory relief. The Lot Owners attached a copy of the subdivision's original Declaration, and pointed out that the Declaration did not provide a method for amending the assessments. The Lot Owners argued that in the absence of any method for amending the assessments, the Association had no authority to adopt the 1996 Amendment and the Amendment was void as a matter of law.

         In response, the Association argued that a fact issue existed whether the 1996 Amendment was properly adopted and filed. In particular, the Association argued that the 1996 Amendment was permitted by the Association's amended bylaws, which the Association claims were amended in 1983 to provide a method for changing the amount of the assessments. The Association, however, did not indicate when the original bylaws were adopted, did not describe what was contained in the original bylaws, and failed to provide as summary judgment evidence either the original bylaws or the Amended Bylaws. The Association did point out in their response to the summary judgment motion that the 1996 Amendment, a copy of which was attached to the Lot Owners' motion, contained a reference to the Amended Bylaws. In particular, the 1996 Amendment stated that the Association was governed by "certain Bylaws" that were filed in the Hood County Deed records in October 2013, which provided that "[a]ssessments and/or other charges to the membership may be changed by the approval of five members of the Board, plus the approval of 2/3 of the membership present and voting at a regular or special meeting[.]"

         The Association attached an affidavit to its response from its current President stating that he was present at the November 1996 "special meeting" at which the 1996 Amendment was adopted, and that "[t]here were five members of the Board present and 2/3 of membership present voted to approve the increase in assessments and charges." In addition, the Association also attached the minutes from the November 1996 meeting, indicating that seven (rather than only five) Board members and 27 homeowners attended the meeting, and a vote was taken to amend the Declaration to raise the assessments by adding on a single payment of $15 annually to both categories of lot owners. For reasons that are not clear from the record, the Board did not prepare its minutes of the November 9, 1996 meeting until almost seventeen years later at a meeting on March 26, 2013, and did not file the minutes with the Hood County Clerk's Office until March 27, 2013. Also, for reasons not clear from the record, the 1996 Amendment was not filed in the deed records until October 21, 2013. Finally, the Lot Owners also attached a document signed by the Association's "Secretary/Registered Agent, " (apparently prepared for purposes of filing the 1996 Amendment with the Hood County Clerk's Office in October 2013) stating that seven board members and 27 homeowners were present at the November 9, 1996 meeting, and that the amendment containing the "changes" to the assessments "passed unanimously."

         Following hearing, the trial court granted partial summary judgment in favor of the Lot Owners. In its order, the trial court expressly determined that the 1996 Amendment, as filed in the county deed records, was "null, void and of no effect." The trial court also concluded that the minutes of the November 1996 meeting at which the 1996 Amendment was purportedly adopted, as filed in the county deed records, were also null and void.

         The Lot Owners subsequently filed a second motion for summary judgment, in which they argued that because the trial court had determined the 1996 Amendment was void, the assessments that the Association had collected pursuant to that amendment were necessarily improper, and that they were entitled to be reimbursed for those assessments, along with an award of attorney's fees. The motion included affidavits and other documentation from the Lot Owners, setting forth the amounts they believed they had been overcharged. It does not appear from the record that the Association filed a response to that motion.

         The trial court entered a final summary judgment in the Lot Owners' favor. In its order, the trial court reiterated its conclusions that the 1996 Amendment and the minutes from the November 1996 meeting were both void, and awarded damages to the Lot Owners for the assessments the Association had imposed on them pursuant to the 1996 Amendment, together with an award of attorney's fees.[2] This appeal followed.

         DISCUSSION

         The Association contends on appeal that the trial court erred in granting summary judgment for the Lot Owners, because fact issues remain regarding whether the 1996 Amendment was validly adopted in accordance with the Amended Bylaws and the Texas Property Code. We disagree.

         Judicial Notice

         As a preliminary matter, the Association has acknowledged that it did not include a copy of the Amended Bylaws in its response to the Lot Owners' motion for summary judgment, and therefore the Bylaws are not part of the appellate record. The Association asks that we take ...


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