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Cosmopolitan Condominium Owners Association v. Class A Investors Post Oak, LP

Court of Appeals of Texas, First District

April 27, 2017

COSMOPOLITAN CONDOMINIUM OWNERS ASSOCIATION, Appellant
v.
CLASS A INVESTORS POST OAK, LP, Appellee

         On Appeal from the 190th District Court Harris County, Texas Trial Court Case No. 2016-18261

          Panel consists of Justices Keyes, Bland, and Huddle.

          MEMORANDUM OPINION

          REBECA HUDDLE, JUSTICE

         Class A Investors Post Oak, LP ("the Developer") sued the Cosmopolitan Condominium Owners Association ("the Association") seeking a declaratory judgment after the Association opposed the Developer's plans to build a high-rise on land adjacent to the Cosmopolitan Condominium. The Developer asserted that the Association was reneging on its agreement to cooperate in the construction of the Developer's planned neighboring high-rise and sought a declaratory judgment declaring its rights under the agreement. The Association moved to dismiss under the Texas Citizens Participation Act (TCPA), claiming that the Developer's suit was based upon the Association's exercise of the rights of free speech, to petition, and of association. The trial court denied the motion.

         We affirm.

         Background[1]

         In 2006, the owners of two adjacent pieces of property, Cosmopolitan VP, L.P. and AmREIT, were each planning to build high-rise towers on their respective lots. They executed a Temporary Use and Aerial Encroachment Agreement ("the Agreement") to facilitate the planned development. In it, each acknowledged that Cosmopolitan was "developing a high rise condominium tower" on its lot, and that AmREIT "anticipate[d] that it or its successors will redevelop the AmREIT Property in the future with a mixed use high rise tower." Both agreed that they "desired[] to facilitate the development" of both projects, and each agreed that the other would require the use of a portion of the surface and air rights of the other's property to do so. The agreement, which is recorded in the Harris County real property records, set forth the terms of the aerial and construction easements and states that it is binding on all successors and assigns.

         The Cosmopolitan high-rise was completed first. When the Association, the entity that handles the collective affairs of the owners of the condominium units in the Cosmopolitan, learned that AmREIT was moving forward with its plans to build its mixed-use high-rise tower ("the Post Oak project"), the Association's lawyer wrote AmREIT to complain. The April 2014 letter asserted that AmREIT's proposed tower would "be vastly oversized for its proposed location; situated perilously close to the Association's building; create extraordinary traffic hazards; impede fire protection and other emergency vehicles in the area, and substantially interfere with the use and enjoyment of the Association's property." The letter demanded that AmREIT "immediately initiate a litigation hold" related to the project.

         AmREIT responded by letter, noting that the Association was bound by the Agreement in which each party had agreed to cooperate in the development of the other's project. The Association wrote back, asserting that the Agreement was "notably vague[, ] indefinite and unenforceable, " and that "[c]learly, a justiciable controversy exists as to the rights and status of our respective clients under the 2006 Agreement."

         The following year, the Developer acquired AmREIT's rights to the Post Oak property. In an affidavit attached to the Developer's response to the Association's motion to dismiss, Brian Dinerstein, a representative of the Developer, averred that the Developer reviewed AmREIT's business records and discovered the correspondence from the Association demanding a litigation hold and questioning the enforceability of the Agreement. The Developer communicated with and met with the Association in an attempt to "move forward cooperatively as the Agreement had outlined." Dinerstein averred that the Developer shared traffic studies, building plans and designs, and construction plans, attended Association Board meetings, and interacted with Dr. Karen Brown, the president of the Association Board. At one point, Brown emailed Dinerstein:

I asked for your traffic study and haven't gotten it yet. I requested that we both bring our traffic/urban professionals and I haven't heard back from you. I need to let our person know and I need materials to prepare for our meeting. I hope the purpose of the meeting is not to threaten us with a more disruptive building design once again. That would be really unfortunate for all of us and certainly put us in the courthouse.

         The Association also requested all documents the Developer had submitted to the City of Houston.

         Dinerstein averred that the Developer proposed numerous concessions related to the development of the Post Oak property, but the Association remained opposed, threatened litigation, and "refused to acknowledge or agree to the existence, enforceability, or effect of the Agreement." A group of the Cosmopolitan's unit owners also retained a separate attorney, who wrote the Developer to request design, engineering, and construction documents related to the Post Oak project. The letter stated that "it is not our intent to initiate litigation, " but rather, to "avoid it through an exchange of information and further informed discussion."

         Shortly thereafter, the Developer sued the Association for a declaratory judgment. The Developer sought declarations that the Association was bound by the Agreement, had agreed to facilitate the development of a high-rise tower on the Post Oak property, had agreed to aerial and construction easements, and was precluded from claiming that a high-rise consistent with the Agreement was a nuisance:

(1) Cosmopolitan Association is bound by the Temporary Use and Aerial Encroachment Agreement, File No. 20060071900, which runs with both the Post Oak ...

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