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Seeger v. Del Lago Owners Association

Court of Appeals of Texas, Ninth District, Beaumont

May 3, 2018

RICHARD VAUGHN SEEGER AND BEVERLY SEEGER, Appellants
v.
DEL LAGO OWNERS ASSOCIATION, Appellee

          Submitted on January 25, 2018

          On Appeal from the 284th District Court Montgomery County, Texas Trial Cause No. 15-03-03034-CV

          Before Kreger, Horton and Johnson, JJ.

          MEMORANDUM OPINION

          HOLLIS HORTON Justice

         In six appellate issues, Richard and Beverly Seeger ask the Court to reverse a final judgment holding them liable to Del Lago Owners Association (the Association) for $12, 999[1] in past due assessments on three lots that they own in Del Lago, a residential community located in Montgomery, Texas. Additionally, the Seegers were also found liable under the judgment for the attorney's fees and expenses that the Association incurred through trial, together with additional attorney's fees awards if the Seegers chose to appeal.

         In their brief, the Seegers argue that this Court should reverse the awards the Association recovered against them in the judgment. With respect to the award of past due assessments, we conclude the arguments the Seegers raise in their brief to reverse the judgment as to the past due assessments are without merit. With respect to the Seegers' arguments challenging the attorney's fees awards, we conclude the jury erred by basing its award on the evidence presented by the Association, which failed to properly segregate the fees the Association incurred between the claims on which a recovery of fees is available and the claims on which it was not entitled to recover its fees. See Tony Gullo Motors I, L.P. v. Chapa, 212 S.W.3d 299, 313 (Tex. 2006).

         Background

         In 2011, the Seegers stopped paying the annual assessments on their three lots in Del Lago. Like other lots in Del Lago, the Seegers' lots are burdened by deed restrictions that include covenants obligating property owners that own lots in Del Lago to pay various assessments[2] to the Association. In March 2015, the Association sued the Seegers to collect the past due assessments that it claimed the Seegers had not paid, and to foreclose on its assessment lien, a lien provided for in the Covenants. The Association also sought to recover the attorney's fees it incurred in collecting the assessments it claimed the Seegers owed and to foreclose its assessment lien on the Seegers' lots.

         The Seegers filed a general denial when they appeared in response to the Association's suit. Approximately four months later, the Seegers filed a counterclaim against the Association. In their counterclaim, the Seegers alleged the Association breached the obligations that it owed them under its "contract with the Seegers by failing to provide the services owed to the Seegers as stated in the [Covenants, ]" breached the fiduciary duty that it owed them in its status as their homeowners association, and engaged in a conspiracy with the entity that owns the golf course to deprive them of the services they were entitled to receive from the Association as homeowners. The Seegers subsequently amended their counterclaim, and added negligence and intentional infliction of emotional distress claims to the theories of recovery they filed against the Association. Additionally, the Seegers' amended counterclaim includes a claim for attorney's fees.

         Subsequently, approximately one year after it filed its suit, the Association filed a hybrid traditional and no-evidence motion for summary judgment. See Tex. R. Civ. P. 166a(a), (i). The hybrid motion sought to defeat some of the theories the Seegers raised in their counterclaim. In the no-evidence section of the Association's motion, the Association alleged that the Seegers could produce no evidence to show they were damaged by the Association, no evidence to show the Association had breached a contract, no evidence to show that the Association had a fiduciary duty to the Seegers or that it breached such a duty, no evidence to substantiate their claim that the Association had engaged in a conspiracy with the entity that owns the golf course, no evidence to establish that the Seegers had a right to recover attorney's fees, and no evidence to show that the Association was liable to the Seegers for exemplary damages. In the traditional section of its motion, the Association raised a two-year statute of limitations defense to the Seegers' claim for conspiracy. See Tex. Civ. Prac. & Rem. Code Ann. § 16.003 (West 2017).

          Approximately two weeks after the Association filed its hybrid motion, the Association notified the Seegers that the trial court would consider the hybrid motion on May 11, 2016, by submission.[3] Just one week before the trial court was to hear the Association's hybrid motion, the Seegers filed their response. In the response, the Seegers asked the trial court to delay considering the Association's motion. As to the merits of the Association's motion, the Seegers argued that "myriad issues of material fact" existed regarding their claims. The Seegers' response suggested the trial court should review the summary judgment evidence accompanying the Association's motion, together with several other documents that the Seegers attached to their response. The Seegers attached six groups of documents to their response: (1) an affidavit executed by Richard Seeger, which contains his explanation regarding why he chose to discontinue paying the assessments the Association levied on his lots; (2) records from St. Luke's Hospital, which indicate that on April 9, 2016, Beverly Seeger was treated and released from that facility after she was diagnosed with essential hypertension and heart palpitations; (3) a handwritten, but unsigned timeline of events listing various complaints that the

          Seegers had made about the Association, starting in 2008; (4) uncertified copies of records from the Montgomery County Sheriff's Office indicating that Beverly Seeger was charged with misdemeanor assault in June 2012 after an Association board member complained that Beverly had thrown water at him following an argument with a groundskeeper, who was employed by the golf course, over whether the groundskeeper had the right to clear away some brush that was located near the Seegers' lots; (5) an unsigned handwritten timeline of events, which lists a variety of complaints about the Association's failure to remedy several problems that the author of the document indicates occurred on the Seegers' property; and (6) an affidavit from the Seegers' attorney, explaining why the Seegers desired a continuance regarding the date the court indicated that it would consider deciding the Association's motion for summary judgment.

         Without ever expressly ruling on the Seegers' motion for continuance, the trial court granted the Association's motion in June 2016 regarding the Seegers' breach of fiduciary duty and civil conspiracy claims.[4] Nevertheless, the trial court's order of June 2016 did not dispose of all of the Seegers' counterclaims and the court's summary judgment was interlocutory. See Farm Bureau Cty. Mut. Ins. Co. v. Rogers, 455 S.W.3d 161, 164 (Tex. 2015) (holding that a summary judgment order that failed to dispose of all of the parties' claims was not a final, and appealable, order).

         In late May 2016, the Association filed a traditional motion for summary judgment on the claim it filed against the Seegers to collect the amount the Seegers allegedly owed to the Association in past due assessments. In its traditional motion, the Association also sought a summary judgment ruling on its claim for attorney's fees. Six weeks later, the Association amended its traditional motion for summary judgment, and the Association attached the following evidence to its amended motion: (1) certified copies of the deeds the Seegers used to acquire their lots in Del Lago; (2) a certified copy of the Covenants; (3) an affidavit from the custodian of records for the Association stating that the Seegers owed the Association $12, 999 in unpaid assessments after considering all offsets and credits; and (4) an affidavit from one of the attorneys who represented the Association, which addresses the Association's claim for attorney's fees.

         In late July 2016, the Seegers responded to the Association's amended traditional motion for summary judgment. In their response, the Seegers argued that the Association had materially breached the Covenants by failing to provide their lots with all of the services the Association was required to provide them based on the Association's obligations under the Covenants. The Seegers asserted that the Association's breach excused any duty they might have otherwise had to pay the assessments. The Seegers attached the following evidence to their response: (1) the affidavit of Richard Seeger, acknowledging that he stopped paying the assessments because the Association failed to provide "services that it provides to all the other homeowners in Del Lago"; (2) deposition excerpts from a deposition taken in the case from one of the Association's Board Members, who discussed an occasion when Beverly Seeger allegedly threw water at him while he was talking to Richard Seeger about a groundskeeper who worked for the golf course; (3) pages from a deposition given by the Association's manager of accounts, which indicates that on the day her deposition was taken, she saw that the street in front of the Seegers' home was in need of repair, and she denied that the Seegers ever informed her that any repairs were needed to their street; and (4) an affidavit from the attorney representing the Seegers, who suggested the amount the Association was seeking in attorney's fees was unreasonable. Ten days before the trial began, the trial court granted the Association's motion for summary judgment in part, ruling that the Association should recover on its claim for past due assessments totaling $12, 999.

          On August 15, 2016, the case was tried on the issues that had not been resolved by the trial court in its interlocutory summary judgment rulings. According to the Seegers, the parties tried the case on the issues of the reasonableness of the Association's claim for attorney's fees and the Seegers' claim that the Association had breached its contract with the Seegers.[5]

         The Association called seven witnesses to testify in the trial: (1) the Association's manager of accounts; (2) an attorney who testified regarding the reasonableness of the attorney's fees the Association was charged by his firm; (3) a homeowner residing in Del Lago, who testified that he regularly saw security, landscapers, and road repairs provided to the lot owners who live in Del Lago; (4) Lieutenant Stewart Hightower, the director of security for the Association, who testified that the Association provides security services to Del Lago and has done so to his knowledge since 2004; (5) a second homeowner living in Del Lago on the Seegers' street, who testified that he saw landscapers working on the pocket plant in front of the Seegers' home approximately one month before the trial and that the pocket plants and the roads in Del Lago are regularly maintained; (6) an employee of the landscaping company the Association used to service the landscaping in Del Lago, who testified that he had worked on the landscaping in Del Lago since 2011, that he had serviced the pocket plant in front of the Seegers' home every year, and that in 2015, Richard Seeger told his helper, "don't worry about it[]" when the helper told Seeger that the landscapers were planning to work on the pocket plant located in front of the Seegers' home; and (7) Beverly Seeger, who testified that she and Richard stopped paying the assessments in 2010, after their home flooded because the entity that owned the golf course failed to properly maintain the drainage on the course, that she never informed the Association she wanted the pocket plant in front of her home maintained, and that she never told the Association their street was in need of repairs.

         The Seegers called four witnesses in the trial: (1) a current member of the Association's Board of Directors, who testified that he complained to the police in 2012 that Beverly Seeger threw water on him while he was speaking to Richard Seeger about removing crime scene tape that the Seegers had placed around their property, and that the Association provided the Seegers with all of the services that it provided to the other homeowners in Del Lago; (2) Richard Seeger, who described how the Association had failed to provide the Seegers with the services that he felt the Association was obligated to provide to all homeowners living in Del Lago;[6] (3) Beverly Seeger, who complained the Association failed to provide them with security, landscaping, and street repairs; and (4) the attorney for the Seegers, who testified that $20, 000 to $25, 000 was a reasonable sum for the attorney's fees that the Seegers had incurred to prosecute their claims, and that the Association's claim for attorney's fees was unreasonable because its claim for such fees should not have exceeded $7, 000.

         At the conclusion of the trial, the jury found that the Association had not "fail[ed] to comply with its contract with the Seegers." In another issue, the jury found that the Seegers "fail[ed] to comply with their contract with Del Lago[.]" In a separate issue that asked if the Seegers' failure to comply with their obligations was excused, the jury found that the Seegers' failure to comply with their obligations to the Association were not excused "by [the Association's] prior failure to comply with a material obligation of the same agreement[.]"[7]

          The jury was then asked to determine what the Association should recover in the reasonable and necessary fees for the services of its attorneys "in this case." The jury found that the Association should recover $51, 497 in fees for "preparation and trial[, ]" $10, 000 "[f]or an appeal to the Court of Appeals[, ]" and $15, 000 "[f]or an appeal to the Supreme Court of Texas." The jury failed to award the Seegers anything on their claim seeking to recover their attorney's fees.

         In late August 2016, the trial court rendered a final judgment. After the trial court denied the Seegers' motion for new trial, and denied the Seegers' request asking for a ...


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