Appeal from the 215th District Court Harris County, Texas
Trial Court Case No. 2010-71771
consists of Justices Massengale, Brown, and Huddle.
appeal arises out of a dispute over the continuing
enforceability of restrictive covenants governing the Houston
shopping center formerly known as Sharpstown Mall.
LLC owns five overflow parking areas along the southern and
eastern edge of the mall property that are alleged to be
underutilized. EWB ("Overflow Owner") wishes to
develop these overflow parking areas for commercial use,
including possibly constructing a free-standing bank on one
of the lots, but there are long-standing restrictive
covenants that limit the use of these areas to only parking
for the mall structure. Overflow Owner filed suit against all
other entities to which the mall complex's restrictive
covenants apply, seeking a declaratory judgment that various
covenants are no longer enforceable, as well as injunctive
relief and damages.
are seven defendants in the suit: PlazAmericas Mall Texas,
LLC ("PlazAmericas Texas"); Sharpstown Mall Texas,
LLC ("Sharpstown Texas"); Burlington Coat Factory
Realty of Bellaire, Inc.; Mai & Matthew, R.E.I., Inc.;
CCW, LLC; Smith, FLP, Ltd.; and LG Sharpstown Bellaire, LLC.
Each holds an ownership interest in one of the structures
within the mall complex. These defendants (referred to
collectively as "Structure Owners") own the three
anchor-tenant buildings, the main mall building where smaller
retail tenants sell their goods, an adjacent office building,
and an on-site parking garage. The party that owns the main
mall building also owns the parking surface lots closest to
the mall. That party is PlazAmericas Texas, which acquired
its interest from Sharpstown Texas.
Owners moved for summary judgment and for dismissal of
Overflow Owner's suit. The trial court granted Structure
Owners summary judgment on Overflow Owner's declaratory
judgment claims and dismissed the injunctive relief claims
for lack of jurisdiction. Ultimately, the trial court entered
a take-nothing judgment in favor of Structure Owners on all
Overflow Owner's claims and awarded attorney's fees.
Owner appeals, arguing in seven issues that the trial court
erred by granting summary judgment, dismissing its claims for
injunctive relief, awarding attorney's fees, entering a
final judgment without finally disposing of all claims, and
striking certain summary-judgment evidence. We reverse the
judgment and remand for further proceedings consistent with
Mall was developed more than 40 years ago as the first
enclosed, air-conditioned shopping mall in Houston. It was a
premiere retail facility with three anchor tenants:
Montgomery Ward, J.C. Penney, and Foley's. The three
anchor tenants were connected by a large main mall structure
that housed additional, smaller retailers. Between the main
mall structure and the primary surface parking lots was a
multi-floor office building.
accommodate the traffic to this regional mall, the developer
constructed a three-story parking garage near the Foley's
store as well as surface-level parking at each end of the
property and along the perimeter of two sides of the property
as shown below:
single entity owned all the realty for this project. Each
anchor-tenant location had a separate owner. The office
building had a separate owner. And the original mall
developer owned what was left: the main mall structure and
all of the parking areas, including the parking garage, the
surface parking areas surrounding the mall structure, and the
five overflow parking areas. Thus, as originally configured,
every owner held an ownership interest in at least one
building; no party owned only parking lots. And the success
of the entire mall complex required the owners to work
ensure a cohesive approach to the development of the mall,
all the various owners, in 1979, entered into or consented to
a contract-a Restated Operating Agreement
("ROA")-that contained various restrictive
covenants. The ROA stated that it would be binding on all
parties and their successors and assignees until termination
of the agreement in 2035 or earlier by agreement. The ROA was
part of a "major overhaul" of the mall that added a
second story, a food court, the J.C. Penney store, and a
parking garage. It governs all aspects of the operation of
the mall and the mall complex, including security,
maintenance, ingress, egress, and parking. Adequate parking
was vital to the success of the entire mall complex.
the ROA restrictions was that the parking area (which was
defined to include the parking garage and all surface parking
lots) had to contain no less than five parking spaces for
each 1, 000 square feet of floor area in the mall.
"Floor area" was defined to include all the floor
space in the mall, regardless of whether it was actively
being used for retail sales. It prohibited parties from
diminishing the area on each party's parcel reserved for
parking or from placing obstructions or permanent
improvements of any kind in the parking area or parking
the years, individual portions of the mall were sold to
various successors. In 2004, for the first time, ownership of
some of the parking areas was transferred to a party that did
not also own one of the mall structures. Ownership of the
five overflow parking lots was transferred by one of the
Structure Owners to a related entity, NBC-Bellaire Parcel
Development, LLC. The newly formed entity then used the five
overflow parking lot as collateral for a nearly $6 million
loan. Appellant EWB is the current successor to the lender.
In 2008, NBC-Bellaire defaulted, and the following year, in
May 2009, EWB (referred to throughout as Overflow Owner)
foreclosed on the five tracts and became the owner of the
overflow parking area. Both before and after Overflow Owner
obtained its ownership interest, Sharpstown Mall was
changing. More specifically, it was declining.
The mall's decline
Mall was developed as a "first class regional shopping
center." But the mall went through a period of
transition and decline in the 1990s and 2000s. All three
anchor tenants closed within a ten-year period: J.C. Penney
closed in the late 1990s; Montgomery Ward closed next; and
Foley's, which was the largest and considered the main
anchor of the mall, closed last, in 2007.
2010, the J.C. Penney location reopened as "Clarewood
Mercado, " which is a collection of small, individual
vendors. The Montgomery Ward store was replaced by a retailer
with a smaller national presence, Burlington Coat Factory.
And the Foley's site was padlocked and has remained
anchors to draw traffic to the mall, the character of the
retailers filling the main mall structure also changed. The
mall retail space was set up as a
"flea-market"-style shopping area. Photographs
depict caged, micro-retail stores surrounded by vast areas of
unused space. There is evidence that the flea-market shopping
area did not draw the level of traffic that Sharpstown Mall
once enjoyed. There is also evidence that the parking lots
would no longer fill, even during the height of Christmas
its parking areas go unused, Overflow Owner sporadically
allowed traveling carnivals to operate on its parking lots.
These carnivals have popped up for many years, though the
parties dispute the frequency and whether any parties to the
litigation have ever objected to their operation.
2011, PlazAmericas Texas, which owned the main mall
structure, the primary surface parking areas, and the parking
garage, closed the parking garage to the public. The parking
garage was closed despite the ROA requirements that parking
areas may not be diminished or obstructed and that a minimum
of five parking spaces remain available for every 1, 000
square feet of mall floor area.
Overflow Owner sues to modify the ROA
2010, Overflow Owner sued Structure Owners. Overflow Owner
sought, among other claims, a declaratory judgment that the
ROA's parking restrictions were unenforceable and that
the ROA be modified to allow reasonable retail development of
its overflow parking lots under the changed-conditions and
waiver doctrines or, alternatively, it sought a permanent
injunction requiring all Structure Owners to fully comply
with the ROA.
Owners and Overflow Owner filed competing motions for summary
judgment on Overflow Owner's claims for declaratory
judgment. Structure Owners also moved to strike portions of
Overflow Owner's summary-judgment evidence. The trial
court struck certain exhibits relied on by Overflow
Owner's expert witness, Joe Webb. It then granted partial
summary judgment to Structure Owners and denied Overflow
Owner's motion. The trial court also sustained Sharpstown
Texas and PlazAmericas Texas's plea to the jurisdiction,
in which they argued that Overflow Owner lacked standing to
enforce ROA covenants because Overflow Owner was not an
intended beneficiary of the covenants and suffered no injury
from their alleged violations. The trial court dismissed
Overflow Owner's injunctive claims without prejudice.
these interlocutory orders, all Overflow Owner's causes
of action were dismissed or adjudicated, leaving the award of
attorney's fees as the sole remaining issue. Overflow
Owner opposed any fee award, arguing that its request for
declaratory relief was an action to remove a cloud on title,
for which fees cannot be recovered. The trial court granted
Structure Owners' motion for attorney's fees and
entered a final judgment incorporating all of its
interlocutory summary judgments, dismissals, and fee orders.
Owner now appeals, arguing that the trial court erred in
granting summary judgment on its declaratory-judgment claims,
dismissing its claims for injunctive relief, striking
portions of its summary-judgment evidence, and awarding
attorney's fees to Structure Owners.
Judgment on Declaratory-Judgment Claims
Owner sought a declaratory judgment that the ROA's
requirement of maintaining five available parking spaces for
every 1, 000 square feet of mall floor area-a restriction
that arguably prevents the use of the overflow lots for other
commercial purposes-is unenforceable and subject to judicial
reformation on two independent theories: changed conditions
and waiver. Several Structure Owners filed motions for
summary judgment or joined in others' motions for summary
judgment on the theories of changed conditions and waiver.
First, Smith moved for summary judgment on the changed
conditions theory. Burlington joined Smith's motion.
Second, Sharpstown Texas moved for partial summary judgment
on the declaratory judgment claims generally, arguing that
there had not been sufficient change in conditions and that
it had not waived any restrictions through a course of action
within the overflow lots. Three co-defendant Structure Owners
joined Sharpstown Texas's motion: PlazAmericas Texas,
Burlington, and CCW. The trial court granted both motions and
dismissed Overflow Owner's declaratory-judgment claims as
to all Structure Owners, meaning that the trial court
rejected the changed conditions and waiver theories as a
matter of law and concluded that Overflow Owner could not
prevail on either theory against any Structure Owner.
first issue, Overflow Owner challenges summary judgment
against it on the changed-conditions and waiver arguments. If
the trial court erred on either of the two theories, the
summary judgment against Overflow Owner on its
declaratory-judgment claims must be reversed.
Standard of review
Owners, defendants in the trial court action, sought summary
judgment on both traditional and no-evidence grounds.
See Tex. R. Civ. P. 166a(c), 166a(i). A defendant
that files a traditional motion for summary judgment has the
burden to show that no genuine issue of material fact exists
and that the trial court should grant judgment as a matter of
law. Tex.R.Civ.P. 166a(c); KPMG Peat Marwick v. Harrison
Cty. Hous. Fin. Corp., 988 S.W.2d 746, 748 (Tex. 1999).
A defendant moving for traditional summary judgment must
conclusively negate at least one essential element of each of
the plaintiff's causes of action or conclusively
establish each element of an affirmative defense. Sci.
Spectrum, Inc. v. Martinez, 941 S.W.2d 910, 911 (Tex.
1997). For a defendant to prevail on a no-evidence motion for
summary judgment, the defendant must establish that there is
no evidence to support an essential element of the
plaintiff's claim on which the plaintiff would have the
burden of proof at trial. See Tex. R. Civ. P.
166a(i); Hahn v. Love, 321 S.W.3d 517, 523-24 (Tex.
App.-Houston [1st Dist.] 2009, pet. denied). The burden then
shifts to the plaintiff to present evidence raising a genuine
issue of material fact as to each of the elements specified
in the defendant's motion. Mack Trucks, Inc. v.
Tamez, 206 S.W.3d 572, 582 (Tex. 2006); Hahn,
321 S.W.3d at 524.
review a trial court's grant of summary judgment de novo.
Travelers Ins. Co. v. Joachim, 315 S.W.3d 860, 862
(Tex. 2010). When reviewing a summary judgment, we must (1)
take as true all evidence favorable to the nonmovant, and (2)
indulge every reasonable inference and resolve any doubts in
the nonmovant's favor. Valence Operating Co. v.
Dorsett, 164 S.W.3d 656, 661 (Tex. 2005); Provident
Life Accid. Ins. Co. v. Knott, 128 S.W.3d 211, 215 (Tex.
construing a contract, we must ascertain and give effect to
the parties' intentions as expressed in the writing
itself. Italian Cowboy Partners, Ltd. v. Prudential Ins.
Co. of Am., 341 S.W.3d 323, 333 (Tex. 2011). To discern
intent, "we must examine and consider the entire writing
in an effort to harmonize and give effect to all the
provisions of the contract so that none will be rendered
meaningless." J.M. Davidson, Inc. v. Webster,
128 S.W.3d 223, 229 (Tex. 2003). We begin with the
contract's express language. El Paso Field Servs.,
L.P. v. MasTec N. Am., Inc., 389 S.W.3d 802, 805-06
(Tex. 2012). "If we determine that the contract's
language can be given a certain or definite legal meaning or
interpretation, then the contract is not ambiguous and we
will construe it as a matter of law." Id. at
806. But, "if the contract is subject to two or more
reasonable interpretations after applying the pertinent rules
of construction, the contract is ambiguous, creating a fact
issue on the parties' intent." J.M.
Davidson, 128 S.W.3d at 229. "When a contract
contains an ambiguity, the granting of a motion for summary
judgment is improper because the interpretation of the
instrument becomes a fact issue." Coker v.
Coker, 650 S.W.2d 391, 394 (Tex. 1983).
Summary judgment against Overflow Owner on claim of
Owner sought a declaratory judgment that the ROA restrictive
covenants were unenforceable due to changed conditions at the
mall that left the restrictions incapable of achieving their
The changed-conditions doctrine
may refuse to enforce a deed restriction when "there has
been such a change of conditions in the restricted area or
surrounding it that it is no longer possible to secure in a
substantial degree the benefits sought to be realized through
the [restriction]." Cowling v. Colligan, 312
S.W.2d 943, 945 (Tex. 1958); see Restatement (Third)
of Property: Servitudes § 7.10 (2000) ("When a
change has taken place since the creation of a servitude that
makes it impossible as a practical matter to accomplish the
purpose for which the servitude was created, a court may
modify the servitude to permit the purpose to be
accomplished. If modification is not practicable, a court may
terminate the servitude."). If the reason for enforcing
a restrictive covenant has ceased, equity will no longer
enforce the covenant. La Rocca v. Howard-Reed Oil
Co., 277 S.W.2d 769, 772 (Tex. Civ. App.-Beaumont 1955,
no writ). The doctrine is based on the "implied intent
of the parties and public policy." Restatement:
Servitudes § 7.10 cmt. a.
qualify as a "changed condition, " the change
cannot be minor; it must be
"radical."E.g., Simon v.
Henrichson, 394 S.W.2d 249, 254 (Tex. Civ. App.-Corpus
Christi 1965, writ ref'd n.r.e.); see Lebo v.
Johnson, 349 S.W.2d 744, 749-50 (Tex. Civ. App.-San
Antonio 1961, writ ref'd n.r.e.); Hemphill v.
Cayce, 197 S.W.2d 137, 141 (Tex. Civ. App.-Fort Worth
1946, no writ). It is not enough that a change reduces the
value of the benefit sought to be realized through the
restriction. But neither is it required that a change fully
eliminate all benefits created by the restriction. Instead,
to qualify as a radical change, it must eliminate a
substantial part of the benefit sought to be achieved by the
restriction. Moseley v. Arnold, 486 S.W.3d 656, 666
(Tex. App.-Texarkana 2016, no pet.); see
Restatement: Servitudes § 7.10 cmt. c (stating that
"the test is not whether the servitude retains value,
but whether it can continue to serve the purposes for which
it was created. . . . The test is a stringent one . . .
are at least six factors that have been identified as
relevant to determining whether changed conditions are
extensive enough to warrant lifting restrictions: (1) the
size of the restricted area, (2) its location with respect to
where the change has occurred, (3) "the type of change
that has taken place, " (4) "the character and
conduct of the parties or their predecessors in title, "
(5) "the purpose for which the restrictions were
imposed, " and (6) "to some extent the unexpired
term of the restrictions." Simon, 394 S.W.2d at
254. Evaluating whether changes qualify as
"radical" to warrant setting aside the parties'
agreed restrictions is a fact-intensive analysis. See
Lebo, 349 S.W.2d at 749. These factors are not viewed
simply in terms of the effects the changes have had on the
lots currently burdened by the deed restriction.
Cowling, 312 S.W.2d at 946. Instead, the proper
analysis requires that we balance the equities. Id.;
Gunnels v. N. Woodland Hills Cmty. Ass'n, 563
S.W.2d 334, 338 (Tex. Civ. App.-Houston [1st Dist.] 1978, no
a changed-conditions analysis is focused on the extent to
which the changes eliminate a substantial part of the benefit
sought to be achieved through the restriction, we first
examine the underlying purpose of the agreed-upon
restriction. See Moseley, 486 S.W.3d at
666. To determine purpose, we look initially to the
terms of the restrictive covenant. Id. at 662. If
the agreement is unambiguous, we determine the parties'
intent from the language used in the document. Id.
at 662-63. If the restrictive covenant is susceptible to more
than one reasonable interpretation as to its purpose, it is
ambiguous and creates a fact issue as to its purpose.
Id. at 668; see Indep. Am. Real Estate,
Inc. v. Davis, 735 S.W.2d 256, 258 (Tex. App.-Dallas
1987, no writ).
The ROA is ambiguous as to purpose, preventing
5.1 of the ROA mandates that a ratio be maintained of
"no less than five automobile parking spaces . . . for
each 1, 000 square feet of floor area." It further
provides that no party shall take any action that would
"diminish the area on [its] parcel reserved for
automobile parking." And it places restrictions on the
size of the mall floor area, while stating that those
restrictions are "to assure that the parking ratio
established in Section 5.1 shall be maintained."
However, the ROA never states the purpose of the mandated
parking ratio. Nor does it expressly address what occurs if
parts of the mall floor area are left unoccupied for years,
as has occurred.
parties read into the document various intentions. According
to Overflow Owner, the benefit that the parties intended to
secure through the parking ratio requirement was
adequate parking for the mall. Overflow Owner argues
that, while "[e]xpansive parking lots were at one time
necessary to support the large volume of shoppers national
anchor tenants attracted, " the overflow lots no longer
serve that purpose because the mall never requires overflow
parking. It concludes that the mall no longer needs, and is
not reasonably likely in the future to need, the parking
ratio specified in the ROA. According to Overflow Owner,
because there is adequate parking close to the mall
entrances, the restriction on the outer-most lots-the
overflow parking lots it owns-no longer serves the
Owners deny that the parties intended a quantitative analysis
of parking need. They argue that the purpose of the
restrictions was not necessarily to provide adequate parking
but, more generally, to make the area available for parking.
According to Structure Owners, the overflow lots "are
still available for parking . . . and . . . Mall customers
still use [them] for parking." Thus, they argue, the
benefit sought to be secured is still fully capable of being
realized: parking in this area of the property. They further
argue that, between the time of this suit and the expiration
of the ROA in 2035, it is possible that the Mall will acquire
tenants with parking needs that would increase the use of the
overflow lots for parking.
to the terms of the agreement itself, there are some
indications that the benefit sought to be realized by the
restrictions was to ensure adequate parking for Mall
visitors. As examples, the ROA mandates that the parties
maintain a ratio of five available parking spaces for every
1, 000 square feet of mall floor area, and it prohibits any
party from ...