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Dealer Computer Services, Inc. v. DCT Hollister RD, LLC

Court of Appeals of Texas, Fourteenth District

April 16, 2019

DEALER COMPUTER SERVICES, INC., Appellant
v.
DCT HOLLISTER RD, LLC; STAPLES, INC.; NORTHWEST CROSSING ASSOCIATION, INC.; FIRSTSERVICE RESIDENTIAL HOUSTON, INC.; KEITH GROTHAUS; VICTORIA BROWN; AND JARED HOTHAN, Appellees

          On Appeal from the 334th District Court Harris County, Texas Trial Court Cause No. 2016-17197

          Panel consists of Justices Jewell, Zimmerer, and Spain.

          OPINION

          CHARLES A. SPAIN, JUSTICE

         This appeal largely turns on standing and appellant's failure to address all grounds for summary judgment on appeal. In the trial court, appellant Dealer Computer Services, Inc. ("Dealer CS") asserted two claims against its across-the-street neighbor, DCT Hollister Rd, LLC ("DCT"), and DCT's tenant, Staples, Inc. ("Staples"). Dealer CS claimed DCT and Staples had violated deed restrictions and created a nuisance. Dealer CS also asserted claims for negligence and gross negligence against its community association (Northwest Crossing Association, Inc.), community association directors (Keith Grothaus, Jared Hothan, and Victoria Brown), and property management company (FirstService Residential Houston, Inc.). The negligence claims were based on the alleged failure of these parties to enforce deed restrictions. In three separate motions, all defendants moved for summary judgment. The trial court granted each motion, dismissing Dealer CS's claims with prejudice. The trial court also awarded attorney's fees to defendants' attorneys.

         In nine issues, Dealer CS appeals the dismissal of its claims on summary judgment and the awards of attorney's fees. We conclude Dealer CS lacks standing to assert deed-restriction violations. Because the trial court's award of attorney's fees was authorized by deed restrictions not enforceable by, or applicable to, Dealer CS, we reverse the trial court's award of attorney's fees. With respect to Dealer CS's other causes of action, we affirm the judgment because Dealer CS failed to address all grounds on which summary judgment may have been granted. Accordingly, we affirm the dismissal of claims and reverse the award of attorney's fees.

         I. Background

         Dealer CS owns an office building in the community known as Northwest Crossing. In 2014, DCT acquired the property and warehouse across the street from Dealer CS's office building. DCT's tenant, Staples, uses the warehouse as a "fulfillment center." In 2015, DCT and Staples expanded the warehouse.

         Northwest Crossing contains four sections built in three different stages. Sections 1 and 2 were established in 1975 under section 1 and 2 deed restrictions. Section 3 was established in 1980 with its own set of restrictions. Section 4 was established in 1981 with yet another set of restrictions. Although DCT's warehouse is across the street from Dealer CS's office building, the warehouse and the office building are in different sections of Northwest Crossing. DCT's warehouse is in section 3 while Dealer CS's office building is in section 4. Section 3 is governed by section 3 restrictions, and section 4 is governed by section 4 restrictions.

         Northwest Crossing Association, Inc. (the "Association") administers deed restrictions in all sections of Northwest Crossing. The enforcement provision of section 3 restrictions provides that the Association may enforce section 3 restrictions "individually and as representative of all Property Owners in Northwest Crossing, Section 3." The enforcement provision further provides that any section 3 property owner may enforce the restrictions if the Association fails to do so.

         In 2016, weeks after the completion of the warehouse expansion, Dealer CS filed suit against DCT and Staples, alleging the expansion violated section 3 restrictions and created a nuisance. According to Dealer CS, the expansion violated the restrictions because: (1) construction of the building was not approved in writing; (2) loading docks face the street and neighboring property; (3) loading docks lack screening; (4) there is encroachment on setback lines; (5) there is inadequate "green space"; and (6) there is inadequate parking. Dealer CS also included as defendants the Association; its directors, Grothaus, Hothan and Brown; and the property management company, FirstService Residential Houston, Inc. (collectively, "Association Defendants"). Dealer CS alleged Association Defendants were liable for negligence and gross negligence in failing to enforce the deed restrictions.

         DCT, Staples, and Association Defendants filed three separate motions for traditional summary judgment, each of which the trial court granted in full. The trial court rendered final judgment in favor of all defendants and awarded attorney's fees to defendants.

         II. Analysis

         Dealer CS presents nine issues on appeal. Dealer CS argues that the trial court erred by deciding the following issues in favor of DCT, Staples, and Association Defendants on summary judgment: (1) standing; (2) amendment; (3) duty; (4) nuisance; (5) limitations; (6) laches, waiver, and estoppel; and (7) settlement and release. Dealer CS also argues that the trial court erred when it (8)overruled Dealer CS's objections to untimely filed evidence, [1] and (9) awarded attorney's fees based on summary monthly totals.

         A. Standard of review

         We review a trial court's granting of a summary judgment de novo. Valence Operating Co. v. Dorsett, 164 S.W.3d 656, 661 (Tex. 2005). When reviewing a summary judgment, we take as true all evidence favorable to the nonmovant, indulging every reasonable inference and resolving any doubts in the nonmovant's favor. Id. Where, as here, a trial court's order granting summary judgment does not specify the ground or grounds relied on for its ruling, we must affirm summary judgment if any of the grounds advanced is meritorious. Carr v. Brasher, 776 S.W.2d 567, 569 (Tex. 1989). We must affirm if an appellant fails to challenge all grounds on which summary judgment may have been granted. Malooly Bros., Inc. v. Napier, 461 S.W.2d 119, 121 (Tex. 1970).

         Traditional. Courts properly render traditional summary judgment if the motion and evidence show there is no genuine issue of material fact and the movant is entitled to judgment as a matter of law. See Tex. R. Civ. P. 166a(c); Nixon v. Mr. Prop. Mgmt. Co., 690 S.W.2d 546, 548 (Tex. 1985). A defendant moving for summary judgment must conclusively disprove at least one element of the plaintiff's claim or prove every element of an affirmative defense. Friendswood Dev. Co. v. McDade & Co., 926 S.W.2d 280, 282 (Tex. 1996).

         Once the movant facially establishes its right to summary judgment, the burden shifts to the nonmovant to present a material fact issue that precludes summary judgment. See City of Houston v. Clear Creek Basin Auth., 589 S.W.2d 671, 678-79 (Tex. 1979). Evidence raises a genuine issue of fact if reasonable and fair-minded jurors could differ in their conclusions considering all the summary-judgment evidence. See Goodyear Tire & Rubber Co. v. Mayes, 236 S.W.3d 754, 755-57 (Tex. 2007) (per curiam).

         No evidence. A no-evidence motion for summary judgment is essentially a motion for a pretrial directed verdict and is governed by the standards of Texas Rule of Civil Procedure 166a(i). Timpte Indus., Inc. v. Gish, 286 S.W.3d 306, 310 (Tex. 2009). After an adequate time for discovery, a party without the burden of proof may, without presenting evidence, seek summary judgment on the ground that there is no evidence to support one or more essential elements of the nonmovant's claim or defense. Tex.R.Civ.P. 166a(i).

         After the movant specifically states the elements for which there is no evidence, the burden shifts to the nonmovant to produce more than a scintilla of probative evidence raising a genuine issue of material fact on those elements. See id.; Mack Trucks, Inc. v. Tamez, 206 S.W.3d 572, 582 (Tex. 2006). More than a scintilla of evidence exists when reasonable and fair-minded persons could differ in their conclusions. Dallas Morning News, Inc. v. Tatum, 554 S.W.3d 614, 625 (Tex. 2018). Less than a scintilla of evidence exists if the evidence creates no more than a mere surmise or suspicion of fact regarding a challenged element. Forbes Inc. v. Granada Bioscis., Inc., 124 S.W.3d 167, 172 (Tex. 2003). Unless the nonmovant produces summary-judgment evidence that raises a genuine issue of material fact, the trial court must grant summary judgment. Tex.R.Civ.P. 166a(i). If the nonmovant satisfies its burden of production on the no-evidence motion, then the trial court cannot properly grant summary judgment. See Smith v. O'Donnell, 288 S.W.3d 417, 424 (Tex. 2009).

         B. Standing

         First, we address whether Dealer CS, who owns property in section 4, can enforce deed restrictions applicable to section 3. On summary judgment, DCT and Staples argued that Dealer CS lacked standing to assert claims based on violations of section 3 deed restrictions because Dealer CS did not own property in section 3 and was not a party to section 3 deed restrictions. Dealer CS argues on appeal that the trial court erred in granting summary judgment based on lack of standing. Dealer CS concedes that it does not own property in section 3, but argues that it nonetheless has standing to seek enforcement of section 3 deed restrictions. Dealer CS contends that the four sections of Northwest Crossing were developed in accordance with a common scheme or plan of development, and therefore, each property owner in the development has standing to enforce section deed restrictions against any other property owner in the development. Dealer CS contends, therefore, that because it owns property in section 4, it has standing to enforce section 3 restrictions against DCT and Staples.

         Standing is implicit in the concept of subject-matter jurisdiction, and subject-matter jurisdiction is essential to the authority of a court to decide a case. Tex. Ass'n of Bus. v. Tex. Air Control Bd., 852 S.W.2d 440, 443 (Tex. 1993).[2] We review standing under the same standard by which we review subject-matter jurisdiction generally. Id. at 446. Whether the trial court has subject-matter jurisdiction is a question of law that we review de novo. Tex. Dep't of Transp. v. A.P.I. Pipe & Supply, LLC, 397 S.W.3d 162, 166 (Tex. 2013); Tex. Dep't of Parks & Wildlife v. Miranda, 133 S.W.3d 217, 226 (Tex. 2004).

         A restrictive covenant such as a deed restriction "is a contractual agreement between the seller and purchaser of real property." Ski Masters of Tex., LLC v. Heinemeyer, 269 S.W.3d 662, 668 (Tex. App.-San Antonio 2008, no pet.). Ordinarily, only the contracting parties and those in direct privity with the contracting parties have standing to enforce restrictive covenants. See, e.g., Davis v. Skipper, 83 S.W.2d 318, 321-22 (Tex. 1935); Ski Masters, 269 S.W.3d at 668. Dealer CS was not party to section 3 deed restrictions, and section 3 deed restrictions do not list Dealer CS as a party who may enforce section 3 deed restrictions. Dealer CS does not dispute that it lacks standing under the terms of the deed restrictions themselves. The enforcement provision of section 3 deed restrictions states that the Association or section 3 property owners may enforce section 3 deed restrictions; they do not provide for enforcement by section 4 property owners or property owners in other sections. Dealer CS nonetheless contends that it has standing to enforce the restrictions because the property is operated under a common scheme or plan. DCT and Staples respond that sections 3 and 4 are separate and distinct subdivisions, pointing out that they were created in different stages, each with its own set of restrictions.

         Under Texas law, "[a] property owner may subdivide property into lots and create a subdivision in which all property owners agree to the same or similar restrictive covenants designed to further the owner's general plan or scheme of development." Jeansonne v. T-Mobile West Corp., No. 01-13-00069-CV, 2014 WL 4374118, *4 (Tex. App.-Houston [1st Dist.] Sept. 4, 2014, no pet.) (mem. op.). When property has been developed under such a general plan or scheme of development, each property owner in the development has standing to enforce deed restrictions against other property owners within the development.[3]CountryCmty. Timberland Vill., L.P. v. HMW Special Util. Dist., 438 S.W.3d 661, 667-78 (Tex. App.-Houston [1st Dist.] 2014, pet. denied); Calvary Temple v. Taylor, 288 S.W.2d 868, 872-73 (Tex. App.-Galveston 1956, no writ). The leading case outlining this doctrine is Hooper v. Lottman, 171 S.W. 270 (Tex. App.-El Paso 1914, no writ). Curlee v. Walker, 244 S.W. 497, 498 (Tex. 1922) (quoting Hooper at length and describing the case as setting out the "correct rules"); Country Cmty. Timberland Vill., 438 S.W.3d at 667 (describing Hooper as the "seminal case regarding enforcement of restrictive covenants by persons who were not party to the covenants"); Interstate Circuit, Inc. v. Pine Forest Country Club, 409 S.W.2d 922, 926 (Tex. App.-Houston 1967, writ ref'd n.r.e.) ...


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