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SVT, L.L.C. v. Seaside Village Townhome Association, Inc.

Court of Appeals of Texas, Fourteenth District

June 28, 2018

SVT, L.L.C. AND ROBERT C. ORR, JR., Appellants
v.
SEASIDE VILLAGE TOWNHOME ASSOCIATION, INC., Appellee

          On Appeal from the 215th District Court Harris County, Texas Trial Court Cause No. 2015-64585A

          Panel consists of Justices Christopher, Donovan, and Jewell.

          MEMORANDUM OPINION

          JOHN DONOVAN JUSTICE

         This appeal is brought by SVT, L.L.C., ("SVT") and Robert Orr, Jr. (collectively "the Developers") complaining of the trial court's judgment on cross-motions for summary judgment in favor of Seaside Village Townhomes Association, Inc. (the "HOA"). The Developers raise six issues. We reform the trial court's order and, as reformed, affirm.

         BACKGROUND

         SVT developed a residential subdivision in Seabrook, Texas. Orr is an officer and owner of SVT. SVT executed a Declaration of Covenants, Conditions and Restrictions ("Declaration") to govern the subdivision and filed it with the Harris County Clerk's office on November 3, 2004. On May 22, 2006, SVT incorporated Seaside Village Townhome Association to act as the homeowners association for the subdivision.

         Initially, the City of Seabrook required SVT to include a detention pond. The situs of the detention pond is the real property described in Exhibit B to the Declaration and is referred to by the parties as the "Repsdorph Property." At issue in this appeal is section 1.8 of the Declaration, which defines "common area" as follows:

SECTION 1.8 COMMON AREA - All real property owned by the Association for the common use and benefit of the Owners, which includes (i) all of the reserves reflected on the plat of the Subdivision, (ii) the real property described in Exhibit "B"[1] attached hereto and incorporated herein for all purposes, and (iii) Lots 11 and 12 in Block 1 of the Subdivision, unless and until the Association conveys either or both of the Lots to a third party for the purposes of constructing Unit(s) thereon at which time the Lot(s) so conveyed will no longer be defined as Common Area and will thereafter be defined as Lot(s).

         The City of Seabrook subsequently eliminated the requirement for a detention pond and SVT had the Repsdorph Property filled in and filed a new plat (the "re-plat") that subdivided the Repsdorph Property to sell as additional residential lots. The re-plat was filed by SVT with the Harris County Clerk on March 5, 2013. In 2015, SVT filed an amendment to the Declaration (the "Amendment) in the Harris County real property records removing the Repsdorph Property from section 1.8. The Declaration expressly permits amendment in section 11.2, which states:

SECTION 11.2 AMENDMENT BY DECLARANT - So long as Declarant owns a Lot in the Subdivision, Declarant without the joinder of any other party, shall also have the authority to amend this Declaration (i) to correct any mistake or errors of a clerical nature resulting from typographical or similar errors, or (ii) for any other reasons, provided the scheme of the Subdivision restricting Lots and Units to single family use only remains in tact [sic].

         On October 28, 2015, the HOA filed suit against SVT and Orr. The Developers counterclaimed and later moved for partial summary judgment. The HOA subsequently filed its' own motion for partial summary judgment. After both sides responded, the trial court conducted a hearing. The trial court then granted the HOA's motion for summary judgment and denied the Developers' motion in an order signed May 27, 2016.

         The HOA later moved to sever. Over the Developers' objection, the trial court granted the motion and entered an order on November 7, 2016, severing the HOA's claims for suit-to-quiet-title and declaratory judgment. The Developers timely brought this appeal.

         THE PARTIES' CLAIMS

         A. The HOA's Petition

         In its opening paragraph, the HOA's petition states "this, its Original Petition for Trespass to Try Title." The petition further claims it is filed "pursuant to the provisions of Chapter 37 of the Texas Civil Practice and Remedies Code and the Texas Property Code."[2]

         In their "Statement of Facts/Actionable Conduct" section, the HOA alleges, in pertinent part, the following:

• The Developers have "refused to transfer control and title to [the Repsdorph Property] as provided by the Declaration;"
• "Failure to Convey Common Areas and Amenities;"
• "the Board of Directors were notified that the [Repsdorph Property] was not simultaneously transferred to [the HOA] as is typical of the industry upon the termination of the Developer-control period;"
• [The Developers] have previously and continue to refuse to transfer title and control of [the Repsdorph Property]; and
• "A subsequent Lis Pendens is being filed to further prevent [the Developers] from clouding title to [the Repsdorph Property]."

         The HOA's requested relief includes "judgment for title to and possession of [the Repsdorph Property] which is the subject matter of this suit.

         The HOA's stated causes of action are for breach of fiduciary duty and breach of contract. The claims for breach of fiduciary duty do not relate to title to the Repsdorph Property. The breach of contract claim is based upon the fact that the Developers "violated the provisions of the Declaration by . . . failing to transfer title to the [Repsdorph Property]."

         B. The Developers' Counterclaims

         The Developers counterclaimed to recover in quantum meruit and for a suit to quiet title and declaratory relief; only the latter two claims are at issue in this appeal. The Developers argue they are the rightful owner of the Repsdorph Property by virtue of the General Warranty Deed dated March 17, 2004. According to the Developers, the HOA's purported claim or interest in the property clouds their title. The Developers contended the Repsdorph Property is not part of the common area because the Declaration was rightfully amended to remove it. The remainder of the common area was conveyed to HOA by Special Warranty Deed, dated November 12, 2015. Further, the Developers sought a declaratory judgment that they are the sole and rightful owners of the Repsdorph Property.

         COMPETING MOTIONS FOR SUMMARY JUDGMENT

         A. The Developers' Motion

         The Developers moved for traditional summary judgment on their counterclaims for suit to quiet title and declaratory judgment. The Developers claimed they proved all ...


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