Appeal from the 56th District Court Galveston County, Texas
Trial Court Case No. 13-CV-0293.
consists of Chief Justice Radack and Justices Jennings and
The Landing Community Improvement Association, Inc. (the
"Association"), challenges the trial court's
judgment, entered after a jury trial, in favor of appellee,
Paul T. Young ("Young"), on his counterclaims
against it for intentional infliction of emotional distress
and a declaratory judgment. In five issues, the Association
contends that the evidence is legally and factually
insufficient to support the trial court's judgment, and
the trial court erred in declaring "void" the
Association's Exterior Maintenance Guidelines, awarding
Young attorney's fees, applying settlement credits,
assessing costs, and not dismissing Young's counterclaims
as barred by the judicial-communications privilege.
reverse and render, in part, and reverse and remand, in part.
Association is a homeowners' association and non-profit
corporation that governs The Landing, Section One, a
residential subdivision located in League City, Texas. In its
second amended petition and application for permanent
injunction, the Association alleged that it was organized for
the purpose of promoting the health, recreation, and welfare
of all residents and owners within the subdivision; enhancing
and protecting the value, desirability, and attractiveness of
the land and improvements; managing and maintaining all
common areas within the neighborhood; collecting maintenance
assessments; providing common services for the subdivision;
and enforcing the "Declaration of Covenants, Conditions,
and Restrictions" (the "Deed Restrictions"),
which govern each of the lots in the subdivision.
Association asserted that the Deed Restrictions, article III,
"Use and Building Restrictions, " provides, in
pertinent part, as follows:
Section 2. Architectural Control. No building or
other structure shall be . . . altered on any Lot until the .
. . specifications therefore . . . have been approved by the
Architectural Control Committee ["ACC"] as to
harmony with existing structures, with respect to exterior
design and color with existing structures.
. . . .
Section 4. Type of Construction, Materials and
. . . .
(b) No external roofing material other than 235# minimum
composition shingles of a wood tone color shall be
constructed or used on any building in any part of the
Properties unless the [ACC] shall, in its discretion, permit
the use of the roofing materials, such permission to be
granted in writing . . . .
. . . .
Section 7. Annoyances or Nuisances. (a) No noxious
or offensive activity shall be carried on upon any Lot or
shall anything be done thereon which may become an annoyance
to the neighborhood. . . .
article IV, "Architectural Control Committee, "
provides, in pertinent part, as follows:
Section 1. Approval of Building Plans. No building
shall be . . . altered on any Lot until the . . .
specifications . . . have been approved in writing as to
harmony of exterior design and color with existing structures
. . . . A copy of the . . . specifications . . . together
with such information as may be deemed pertinent, shall be
submitted to the [ACC] . . . prior to commencement of
construction. The [ACC] may require submission of such other
documents as it deems appropriate, in such form and detail as
it may elect at its entire discretion.
article VI, "Covenant for Maintenance Assessments,
" provides, in pertinent part, as follows:
Section 1. Creation of the Lien . . . . [E]ach owner
of any Lot by acceptance of a deed therefore, whether or not
it shall be so expressed in such deed, is deemed to covenant
and agree to pay to the Association annual maintenance charge
assessments ["maintenance assessments"]. . . . The
[maintenance assessments], together with interest, costs, and
reasonable attorney's fees, shall be a charge on the Lot
and shall be a continuing lien upon the Lot against which
such assessment[s are] made. . . .
. . . .
Section 7. Effect of Nonpayment of
Assessments . . . . If any [maintenance assessments are]
not paid within thirty (30) days from the due date thereof,
the same shall bear interest from the due date until paid . .
. . The Association may bring an action at law against the
[o]wner personally obligated to pay the same, or foreclose
the lien created hereby against the Lot.
Deed Restrictions further provide:
Upon violation or attempt to violate any of the covenants
herein, it shall be lawful for the Association . . . to
prosecute any proceedings at law or in equity against the
person or persons violating or attempting to violate any such
covenant and either to prevent him or them from doing so or
to recover damages for such violations.
Association further alleged that in 2001, its Board of
Trustees (the "Board") adopted "Exterior
Maintenance Guidelines" (the "Guidelines"),
which it recorded in the real property records of the
Galveston County Clerk's Office. The Guidelines provide,
in pertinent part, that
All improvements on a lot must be maintained in a state of
good repair and shall not be allowed to deteriorate. Repairs
shall include, but [are] not limited to, the following:
1. All painted surfaces must be clean and smooth with no bare
areas or peeling paint . . . .
2. All rotted and damaged wood must be replaced. . . . . . .
4. Roofs must be maintained in good repair with no missing or
. . . .
10. There shall be no storage of clutter and debris in public
1992, Young purchased in The Landing subdivision a house,
which was conveyed subject to "all restrictions,
easements, covenants, and conditions of record." He
subsequently allowed the roof of his house to deteriorate to
such an extent as to be unsightly, with missing and curling
shingles, and large bare and discolored areas. And, despite
"numerous written requests" from the Association,
its representatives, and its attorney to comply with the Deed
Restrictions, Young had "failed and/or refused" to
replace the roof of his house with ACC pre-approved roofing
materials; remove a large tree stump from his front yard;
re-paint the trim, fascia boards, and shutters of his house
with an ACC pre-approved paint color; and repair his fence
and gate, which had "been allowed to deteriorate to such
a state as to become unsightly."
the Association filed the instant suit, Young cut down the
tree stump. However, he continued to store the cut piece in
open view against his fence. And although he did replace some
of the shingles on the roof of his house, "it appear[ed]
that [he] did not use the proper type of roofing shingles,
" and the roof remained unsightly.
Association sought injunctive relief, asserting that the
condition of Young's property constituted a
"nuisance and annoyance to the surrounding neighborhood,
and an eyesore to the community." And "unless
[Young] is compelled to comply, the [Deed Restrictions] may
become meaningless and potentially unenforceable, thereby
adversely affecting property values within the neighborhood,
and adversely affecting all present and future owners of
property within The Landing community." It requested an
order directing Young to "completely and fully replace
the entire roof of . . . [his house], with roofing materials
which have been pre-approved by [the Association]";
"fully repair and repaint the trim, exterior wood
surfaces, siding, fascia boards, and shutters of [his] house
. . . with a paint color which has been pre-approved by [the
Association]"; "completely and fully remove the
tree stump located in the front/side yard of [his] property;
and store the tree stump away from public view. The
Association also requested statutory damages in the amount of
$200 per day for each day that Young was found to be, or to
have been, in violation of the Deed Restrictions.
Association further alleged that, despite its written
requests, Young had "failed and refused" to pay the
maintenance assessments and charges that had accrued against
his property. Although Young had submitted one or more
personal checks, he made notations on each as follows:
"paid in full" or "full payment of
account." The Association did not accept his checks
because they did not "constitute a payment, in
accordance with Texas Law." Thus, it sought a judgment
against Young in the amount of $1, 603.99 for delinquent
maintenance assessments, interest, and costs. The Association
further, in response to Young's unpaid annual maintenance
assessments, sought, as provided for in the Deed
Restrictions, a judgment foreclosing its continuing lien
against his property.
answer, Young generally denied the Association's claims,
and he brought counterclaims against it. In his third
amended counterclaims, Young alleged that since 1992, when he
purchased his house in the Landing, he has attempted to abide
by each of the covenants, outlined in the Deed Restrictions,
and timely paid his annual maintenance assessments to the
Association. In 2003, he replaced the roof of his house;
re-painted his house, changing it from a chocolate-brown
color to a cream color; replaced all of his siding, windows,
and exterior doors; replaced and added new light fixtures to
the exterior; and replaced his garage doors. Subsequently,
after some of the shingles were blown off of his roof during
a storm, he replaced them using spare shingles that he had
purchased when he replaced his roof.
January 2012, Michael Treece, the Association's attorney,
sent to Young a letter ordering him to "completely
re-roof his home." The Association required that he
return a completed ACC form, along with documentation of the
proposed roofing material, including style, strength, and
color, within ten days of the date of the letter. It further
required that he replace his roof within twenty days after
receiving notice of ACC approval of the roofing materials.
Young, in a letter to Treece, explained that he "faced
physical and financial limitations due to disability and
being out of work."
February and May 2012, Treece sent to Young letters, again
requiring that he replace his entire roof with materials
preapproved by the ACC. Although Treece acknowledged
Young's concerns and offered a "few months" to
comply, "[n]o hearing or appeal was offered, " and
Young was "told [it] was his 'final
September 2012, Treece sent to Young a letter, demanding that
he replace his roof with ACC pre-approved materials. Noting
that the paint on Young's house was faded and peeling,
the Association also demanded that he re-paint its trim,
fascia boards, and shutters. However, according to Young, his
house had no faded, peeling, or bare paint; "only [a]
relatively small number of shingles were missing" from
his roof; other houses in The Landing had weathered,
discolored, or missing shingles, or had replacements made
with shingles of mixed colors; and he had replaced individual
shingles on his house with shingles left over from the 2003
roof replacement. He asserted that the Deed Restrictions did
not require him to completely re-paint or re-roof his house;
it would take time for the replacement shingles to weather
and match the rest of the roof; and the Association's
demand that he replace his entire roof was "arbitrary,
capricious, and discriminatory" and "part of a plan
to force [him] from the subdivision."
"sometime in 2012, " the Association sent to Young
a letter, "request[ing]" that he remove a tree
stump from his front yard. Although he complied, he noted
that there were tree stumps in other yards in The Landing and
the Association did not send violation letters to those
further alleged that the Association had "deliberately
and knowingly misapplied" his checks for maintenance
assessments for "the years of 2007 through 2011."
And in May 2011, Margaret Eckhardt of AVR Management
Consultants, Inc. ("AVR"),  a property management
company representing the Association, notified him that he
was delinquent in paying his 2011 maintenance assessments.
Young responded that he had timely "dropped [payment] in
the mail slot at the club house the last weekend of January,
" as he "ha[d] done many times over 19 years."
Eckhardt, in a letter dated May 10, 2011, wrote to Young:
We are in receipt of your letter informing us of the payment
made for the year 2011 Maintenance Fees in January. In
reviewing your account, I do see where you have always made
payments on time and I apologize for this inconvenience.
And Eckhardt noted that his payment may have been
"thrown away by mistake." Young provided Eckhardt
with a replacement check, marked "paid in full, "
and he included a letter stating that his check would pay his
account "in full in its entirety." And the
Association accepted and cashed his check. According to
Young, he has "always" written "paid in
full" on the checks that he sent to the Association to
pay his maintenance assessments.
2012, after Young submitted a check to pay his 2012
maintenance assessments, Treece sent to him a letter,
returning the check and claiming that his account had a
balance of $487.31 outstanding from 2011. In March 2013,
Young re-issued a check for his 2012 maintenance assessments
and submitted it and another check to pay his 2013
maintenance assessments. On September 18, 2013, however, the
Association returned both checks.
further alleged that "[f]or years, he has been assessed
fees, fines, and charges by the [Association] . . . for
allegedly violating [the] Deed Restrictions, which [he] has
never violated." He has "undergone continued
threats and harassment by [the Association] . . . to
intentionally instill fear in [him] that he might lose his
homestead of over twenty years." Young has been
"victimized by . . . deliberate, knowing, and
intentional unlawful enforcement [of the Deed Restrictions],
when there was no proper basis for enforcement actions
against him before and during this lawsuit." And
Eckhardt had driven by his house "several times on one
day to taunt him."
brought counterclaims against the Association for breach of
fiduciary duty, breach of contract, intentional infliction of
emotional distress, and a declaratory judgment. In his claim
for intentional infliction of emotional distress, Young
asserted that the Association, after having been informed of
his financial hardship, refused his checks for maintenance
assessments and charged him "unlawful fees." And it
required that he make over $13, 000.00 in repairs to his
house that were not required under the Deed Restrictions. The
Association's conduct was extreme and outrageous, and it
intended to harm Young financially and personally by forcing
him to move from the subdivision. He further asserted that
the fear of losing his house caused him extreme emotional
distress; he was, at the time, in pain from multiple
surgeries and particularly susceptible to emotional distress;
he could not sleep, "especially on days when a letter
came from Treece or Eckhardt"; the "continued
harassment" by the Association caused him to be
depressed and in "constant fear and worry of losing his
home, " which would subside only until the next letter
came; and he has "not had any peace" since the
Association filed its lawsuit. Young generally sought damages
in the amount of at least $95, 190.00.
further sought declarations that
• the Deed Restrictions have an express designation . .
. that provides for the extension of, addition to, or
modification of the existing restrictions by a designated
number of owners of real property in the subdivision[;]
• the Deed Restrictions . . . prevail over the
provisions of Texas Property Code Chapter 204;
• the Deed Restrictions do not have exterior maintenance
guidelines and that the homeowners have not approved any
extension of, addition to, or modification of the Deed
Restrictions by a vote of the majority[;]
• the Deed Restrictions do not allow the [Association]
to impose a $200 punitive per diem fine for alleged deed
restriction violations but only allow for the recovery of
costs and attorney fees[;]
• [Texas Property Code section 202.004, which purports
to allow the [Association] to charge a $200 punitive per diem
fine is unconstitutional, violates public policy, is
inequitable and contrary to Texas common law[;]
• the [Association] ha[s] used the address at 1109
Landing Blvd., League City, Texas 77573 to conduct
transactions between themselves and the homeowner's of
the Landing Subdivision . . .[;]
• the [Association] ha[s] instructed the Landing
subdivision residents to deposit "money in the drop box
(below the mail box)" at 1109 Landing Blvd., League
City, Texas 77573[;]
• when he deposited the payment for 2012 and 2013
assessments, respectively, in the "drop box" . . .
and [the Association] acknowledged receipt of the payment,
that Young had fulfilled his legal obligation to pay
assessments under the Deed Restrictions requiring annual
payment of his homeowner's fees[;]
• the [Association] [is] not entitled to extra fees,
expenses, and attorney's fees over and above Young's
Assessment payments if Young's payment was received but
• the [Association] [is] not entitled to extra fees,
expenses, and attorney's fees over and above Young's
annual homeowner's fees if Young's payment was
received but returned unprocessed (not cashed) . . . [;]
• the Deed Restrictions in Article III, Sec. VII, titled
Annoyance or Nuisances is ambiguous[;]
• the [Association] failed to comply with all the
requirements of the Tex. Prop. Code [ch.] 209 applicable to
Young, which requires the [Association] to send Young a
certified letter stating the exact violation, corresponding
Tex. Prop. Code, corresponding Deed Restriction, charges, if
any, and that Young had thirty (30) days in which Young could
request a hearing, and Tex. Prop. Code [ch.]
wherein the [Association] was required to process and apply
Young's Assessment payments for 2012, 2013 and 2014 to
his [Association] account[; and, ]
• [he] had to hire an attorney to . . . prosecute [his
Association filed an answer, generally denying Young's
claims against it, and it asserted several affirmative
defenses, including "absolute and litigation
trial, Young testified that he had in the past, as a member
of Midtown Park Development Ltd., LLC, developed residential
subdivisions of over 200 homes. He is familiar with the
governing documents pertinent to residential real estate
development, i.e., deed restrictions. And he agreed that his
house is subject to The Landing's Deed Restrictions,
which provide for the creation of an ACC. However, he had
"one of the few homes in the neighborhood that has new
siding, new paint, new front and back doors, new windows, new
roof, new garage door, and new back porch in the last ten
years." Thus, he did not understand why the Association
was perpetually harassing him with violation letters.
trial court admitted into evidence a series of letters, dated
from 1993 to 2013, between Young and the Association; its
previous attorney, Charles A. Daughtry, and later, Treece;
its previous property management company, Houston Community
Management Services, and beginning in 2006, AVR. Each of the
letters from the Association, and its property managers and
attorneys, cites various violations of the Deed Restrictions.
Young explained that, in each instance, he did not request a
hearing on the complained-of matter because "[i]t
January 23, 2012, Treece sent to Young a letter, stating as
The undersigned attorney has been retained by [the
Association] to enforce the deed restrictions which govern
the above-referenced property. Please be advised that the
following conditions which exists on said property constitute
direct violations of the deed restrictions: 1) the commercial
vehicle (18 wheeler rig parked/stored on the driveway must be
removed from the neighborhood, immediately and permanently;
2) the entire roof of the house must be replaced with new ACC
pre-approved roofing materials; and 3) the tree stump must be
. . . .
Please note that all exterior improvements, including roofing
materials must be pre-approved, in writing, by the
Association's [ACC], prior to the start of such a
project. Please complete the enclosed ACC application and
return the document along with documentation of proposed
roofing materials, including style, strength, and color of
shingles to this office within ten (10) days. . . .
Accordingly, please accept this letter as the
Association's formal demand that you remove the large
commercial vehicle, permanently, from the neighborhood within
(3) days of the da[te] of this letter. In addition, you must
return the completed ACC form along with roofing material
information within ten (10) days of the date of this letter.
The entire roof of the house must be replaced within twenty
(20) days, after receiving notice of the ACC approval of the
roofing materials. Insomuch as you have failed to respond to
the Association's previous requests, my client may have
no other choice but to file a lawsuit, seeking a court order
requiring you to immediately comply with the deed
restrictions. Should such legal action become necessary, you
may ultimately be responsible for the Association's costs
and legal fees, which typically exceed $5, 000.00.
Your immediate attention to these matters will be
appreciated. Unless all of the corrective, actions are taken
as specified within this letter, a lawsuit may be ...