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Walls v. Capella Park Homeowners' Association, Inc.

Court of Appeals of Texas, Fifth District, Dallas

November 30, 2017

WILLIE E. WALLS, III, MELODY HANSON, AND MY ROYAL PALACE, DAVID WAYNE WHITAKER, AND ASHUNTIS GRISBY, Appellants
v.
CAPELLA PARK HOMEOWNERS' ASSOCIATION, INC., Appellee

         On Appeal from the 162nd Judicial District Court Dallas County, Texas Trial Court Cause No. DC-13-14480

          Before Justices Lang, Evans, and Schenck

          MEMORANDUM OPINION

          DAVID J. SCHENCK JUSTICE

         Willie E. Walls, III, Melody Hanson, My Royal Palace, David Wayne Whitaker, and Ashuntis Grisby appeal the trial court's judgment granting a permanent injunction and awarding attorney's fees in favor of Capella Park Homeowners' Association, Inc. ("HOA") and denying claims of discrimination in violation of federal and state law.

         Walls and Hanson own two homes (the "Group Homes") in which they operate a for-profit residential program, My Royal Palace, that provides support and services to persons with physical and intellectual disabilities, including residents Whitaker and Grisby. The lots on which the Group Homes are situated are subject to restrictive covenants (the "Declaration"), including one such restrictive covenant ("Restrictive Covenant"), which provides that community or group homes must comply with Section 123 of the Texas Human Resources Code. See Tex. Hum. Res. Code Ann. §§ 123.001-.010 (West 2013 & Supp. 2016). At trial and on appeal, appellants assert the right "to use and enjoy housing in . . . the community they choose to live in" in the same way those without disabilities are able to do. The asserted right proceeds from state and federal fair housing legislation enacted to combat discrimination in the housing market on the basis of disability that has the effect of excluding the disabled.

         Appellants contend the HOA is required by law to refrain from enforcing any restrictive covenants against appellants on account of disability and treat them as if they were not disabled or operating homes for the disabled. The HOA argues their obligation to those wanting to use a home as a community or group home begins and ends with Section 123 of the human resources code, which protects the disabled and mandates accommodation of group homes maintained by government or nonprofit operators. No party addressed whether not enforcing the Restrictive Covenant on account of any reason foreclosing application of Section 123 would place an undue burden on the HOA.

         Appellants' second issue is their central argument, that they are entitled to an accommodation in the form of an exemption from the Restrictive Covenant insofar as it applies because they are disabled or operating a residence for the disabled.[1] Because we conclude they are, we reverse the trial court's judgment.

         Background

         I. Factual Background

         The Group Homes consist of two residential structures situated adjacent to each other in the Capella Park development. Appellants Whitaker and Grisby, suffer severe intellectual and physical disabilities requiring the constant presence of a nurse and the occasional presence of other professionals. They also receive residential support services from Walls and Hanson. At all times, three workers are present at the Group Homes. The lots on which the Group Homes are situated are subject to the Restrictive Covenant, which provides as follows.

In addition to uses which are inconsistent with applicable zoning or are prohibited or restricted by other recorded covenants, conditions, restrictions or easements, the following uses and activities are prohibited within the Neighborhood without the prior written approval of the Board: a community or group home unless such home meets the qualifications imposed under Section 123.004, et. seq. of the Texas Human Resources Code, as the same may be amended from time to time.

         The Group Homes do not qualify as a community home under Section 123 of the human resources code. Section 123 assures the disabled the right to housing and facilities maintained by the government and charities, and makes the right to such housing automatic provided the one-half mile spacing requirement is maintained. See Tex. Hum. Res. Code Ann. §§ 123.004, 123.008.

         In February 2013, Walls and Hanson received a letter from the HOA advising that the Group Homes violated the Declaration by conducting a commercial or home business. Over the following months, Walls and the HOA exchanged correspondence in which Walls asserted that the Group Homes provided residential services to disabled individuals and were protected by the federal Fair Housing Act independent of Section 123 of the human resource code. Walls also requested the HOA cease any and all legal or other administrative actions against him. The HOA maintained that the Group Homes were in violation of the Restrictive Covenant and did not qualify as community homes under Section 123 of the human resources code, and, on that basis, could not be permitted to operate.

         II. Procedural Background

         On December 10, 2013, the HOA filed suit against Walls, Hanson, and My Royal Palace, asserting breach of restrictive covenants and seeking declaratory judgment and a permanent injunction. The following month, Walls, Hanson, and My Royal Palace filed a counterclaim, asserting the HOA had violated the Texas and the Federal Fair Housing Acts. Whitaker and Grisby intervened, joining in the counterclaims against the HOA for violations of state and federal fair housing statutes. The parties jointly submitted the case for judgment on an agreed statement of facts and exhibits, including the Declaration and related amendments and copies of the correspondence between the HOA and Walls. The parties agreed to submit evidence concerning attorney's fees by way of post-judgment motions.

         At trial, the HOA argued the Group Homes violated the Restrictive Covenant because they were not community homes qualified under Section 123 of the human resources code. The HOA urged that Section 123 protects community homes that met certain qualifications, but, by negative implication, it does not prohibit enforcement of restrictive covenants against community or group homes that do not meet those qualifications. It urged below, as here, that a restrictive covenant that does not violate Section 123 is by necessity lawful. The HOA asserted that appellants had failed to prove the requested accommodation of not enforcing the Restrictive Covenant was necessary to afford the ...


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