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LA Tour Condominiums, Inc. v. Keating

Court of Appeals of Texas, Seventh District, Amarillo

April 27, 2018

LA TOUR CONDOMINIUMS, INC., APPELLANT
v.
JOHN E. KEATING AND DOLLETTA KAYE KEATING, APPELLEES

          On Appeal from the County Court at Law No. 2 Potter County, Texas Trial Court No. V-105, 173-00-2, Honorable Pamela Cook Sirmon, Presiding

          Before QUINN, C.J., and PIRTLE and PARKER, JJ.

          MEMORANDUM OPINION

          JUDY C. PARKER JUSTICE

         In this dispute over a condominium association's assessment of a transfer fee, both parties filed motions for summary judgment. The trial court granted summary judgment for John E. Keating and Dolletta Kaye Keating and denied the competing motion filed by La Tour Condominiums, Inc. We will affirm in part and reverse in part.

         Background

         The La Tour condominium regime was organized in Amarillo, Texas, in 1980. The condominium property includes sixty-three units and several common areas and facilities. Management of the common elements is vested in La Tour Condominiums, Inc. ("La Tour"), the managing condominium association and appellant herein. Owners of condominium units are members of the association. At all times relevant to this suit, appellees John E. and Dolletta Kaye Keating were La Tour condominium unit owners.

         In March of 2014, the association's board of directors sent notice to each unit owner that the board had adopted a "buyers [sic] transfer fee of 3% of a Unit's selling price" to raise funds for improving and maintaining the property. Shortly thereafter, the board realized that imposition of such a fee required a vote of the association's members; therefore, no transfer fee was imposed at that time.

         On June 19, 2014, the board notified unit owners that a board meeting would be held on June 23, 2014, to discuss the proposed transfer fee and the associated amendment to the Declaration and Master Deed. Following the meeting, the board informed owners that the proposed transfer fee would be put to a vote, and ballots were delivered to the owners. On June 30, 2014, the president of the board wrote to unit owners, encouraging them to vote in favor of the fee. The board president's letter stated that votes could be cast by signing the ballot before a notary and returning it to the property manager no later than July 15, 2014.

         In a letter to owners dated July 16, 2014, the board announced that as of that date, "62% of the home owners representing 59.0307% of the square footage" had voted to approve the transfer fee. Additionally, owners were informed that if they had not yet voted, they could send in their ballot until July 23, 2015.

         Believing that it had obtained a sufficient number of votes to do so, La Tour filed an "Amendment to the Declaration and Master Deed of La Tour Condominiums" establishing the fee: "Each time an Owner sells a Unit, the Owner must pay the Association a sum of money equal to 3.0% of the sales price (the Transfer Assessments)." This amendment, known as the "July 16th Amendment, " was duly recorded in Potter County. The document included the voting ballots of the owners who had voted in favor of the amendment as of that date.

         On October 14, 2014, the amendment was recorded again. This "October 14th Amendment" was identical to the July 16th Amendment, except that it included additional ballots that had been received since July 16. According to the board, the additional ballots brought the total of all voting interests approving the amendment to 69.05 percent. La Tour began assessing the transfer fee in January of 2015.

         The Keatings filed suit in January of 2016, alleging that the adoption of the amendment was invalid because it was procedurally improper according to the association's governing documents and because it failed to comply with Texas law. They sought a declaration that the board's implementation of the transfer fee was invalid and unenforceable. The Keatings subsequently filed a motion for partial summary judgment, seeking a declaratory judgment on those matters. Specifically, the Keatings requested that the trial court make either of the following declarations: (1) La Tour's "implementation of the transfer fee is invalid because it violates the Texas Property Code's requirement that assessments used for common elements must be assessed pro rata to all Unit owners" or (2) La Tour's "implementation of the transfer fee, even if legally allowable, is unenforceable because [La Tour] failed to pass the Amendment with 67% of the vote at a meeting of the Unit owners, as required by the Texas Property Code." La Tour then filed its own motion for partial summary judgment in which it sought a declaratory judgment that the transfer fee amendment is valid.

         The trial court granted the Keatings' motion for partial summary judgment and denied La Tour's motion. The court conducted a bench trial on the issue of attorney's fees. After entering the final judgment, ...


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