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Smith v. Swede Hill Lofts Homeowners Association, Inc.

Court of Appeals of Texas, Sixth District, Texarkana

July 17, 2019


          Date Submitted: July 1, 2019

          On Appeal from the 353rd District Court Travis County, Texas Trial Court No. D-1-GN-12-001420

          Before Morriss, C.J., Burgess and Stevens, JJ.


          Josh R. Morriss, III Chief Justice

         After Landon Hutchins moved into the condominium of his mother, Lillian Smith, in the Swede Hill Lofts Condominiums (Swede Hill) in Austin, [1] the neighbors began to complain about Hutchins' use of the premises, loud noises and noxious odors coming from his unit, and one or more instances of law enforcement intervention at the unit. When the imposition of fines against Smith for violations of the rules and regulations of the Swede Hill Homeowners' Association (HOA) did not achieve favorable results, the HOA sued Smith and recovered a money judgment and injunctive relief against her. On appeal, Smith claims that the HOA did not properly authorize the fines or the filing of the lawsuit against her. We affirm the judgment of the trial court, because (1) sufficient evidence supports the trial court's finding that the HOA-assessed fines against Smith were properly authorized and (2) Smith's claim that the HOA Board of Directors did not properly authorize the lawsuit against her is not supported by the evidence.

         Smith owns unit 106[2] in Swede Hill. Hutchins moved into the unit and lived there sporadically during 2009. Sometime during 2010, Hutchins began living in unit 106 on a full-time basis. In 2009, the HOA, through its president, Robert Hageman, [3] began to receive complaints about Hutchins' behavior. Those complaints continued through 2011. On March 8, 2011, Hageman e-mailed Smith a letter advising her that a warning letter regarding Hutchins' behavior was being mailed to her by certified mail. The e-mail attached a copy of the HOA rules and regulations and Swede Hill Declarations together with photographic documentation of certain infractions allegedly committed by Hutchins.

         On that same date, the HOA sent formal notice, by certified mail, to Smith and Hutchins stating that further violations would result in a $500.00 fine for the first occurrence and a $1, 000.00 fine for the second occurrence. In January 2012, Hageman sent Smith an e-mail indicating that the HOA would enforce the fines, if the infractions continued. Smith was ultimately fined $500.00 based on the March 2011 warning. Later in January, Hutchins initiated a confrontation with the owner of unit 104 and continued to park in other's parking spaces. As a result of these continued infractions, Smith was fined $1, 000.00 per the board's ruling in March 2011.

         In April 2012, Hageman sent an e-mail to the HOA membership to call a meeting to discuss "[w]hat action should be taken against Mr. Landon Hutchins, tenant of Owner Lillian Smith, Unit 106."[4] Hageman advised the members that "Mr. Bill Davidson, the attorney who drafted all the condo documents[, ] . . . proposed to file for a temporary restraining order then permanent restraining order against Mr. Hutchins/Ms. Smith in county court to limit the adverse actions to the rules of the Association." The e-mail meeting of members was a common practice because many unit owners were out of town.

         Following an online discussion in which Smith participated, Rob Lane moved "that any and all remedies available to [the] Association, be taken against [Hutchins]" in light of his "repeated violation of Swede Hill rules and regulations, as well as his inability to adapt to the norms of communal housing." The motion was seconded by Hageman and Carol Haynes, and the HOA members were provided with ballots to vote for or against "the motion to file a restraining order for conduct adverse to the rules, regs and declaration of the HOA against the owner and resident of Unit 106." The HOA voted to seek a temporary injunction against Hutchins and Smith to restrain further conduct averse to the HOA rules.[5] The HOA's original petition was filed May 9, 2012.[6]

         In January 2013, Hageman sent a notice for an HOA meeting regarding damages to the building allegedly caused by Hutchins. The intent was to ask the attorney who filed the lawsuit relating to the temporary restraining order to likewise request the recovery of damages against Hutchins.[7] Other agenda items included voting on an additional fine against Smith and assessing against Smith the cost associated with obtaining a temporary restraining order. The meeting was held at the Doubletree Hotel on January 30, 2013, [8] at which time each of the agenda items was voted on and passed. Following the meeting, Hageman sent Smith an invoice for $8, 925.00, representing the cost of the agenda items passed at the meeting. A claim for property damage was ultimately included in the HOA's lawsuit.

         Following a bench trial, the trial court entered judgment against Smith for $1, 500.00 for unpaid fines assessed against her by the HOA, $5, 000.00 for damage to HOA property by Hutchins, Smith's tenant, and attorney fees in the amount of $44, 268.98.[9]

         (1) Sufficient Evidence Supports the Trial Court's Finding that the HOA-Assessed Fines Against Smith Were Properly Authorized

         Smith complains that the board failed to approve fines against her at a meeting in which board members could simultaneously hear one another before reaching a determination that it would impose fines. See Tex. Prop. Code Ann. § 82.108(c)(1)(A), (B). As a sub-issue, Smith complains that she was not provided the opportunity to challenge the veracity of the alleged violations before fines were imposed. Smith therefore claims that the fines were assessed improperly and that the trial court erred in making them part of the judgment. We interpret this argument as an attack on the legal and factual sufficiency of the evidence to support the judgment's inclusion of $1, 500.00 in HOA-assessed fines.

         "In reviewing the legal sufficiency of the evidence, we view the evidence in the light most favorable to the judgment, crediting favorable evidence if a reasonable juror could, and disregarding contrary evidence unless a reasonable juror could not." Lugo v. Herrera, No. 03-08-00215-CV, 2008 WL 4823163, at *2 (Tex. App.-Austin Nov. 7, 2008, no pet.) (mem. op.) (citing City of Keller v. Wilson, 168 S.W.3d 802, 807 (Tex. 2005)). The "test for legal sufficiency must always be whether the evidence at trial would enable reasonable and fair-minded people to reach the verdict under review." City of Keller v. Wilson, 168 S.W.3d 802, 827 (Tex. 2005). "In reviewing the factual sufficiency of the evidence, we consider and weigh all of the evidence in the record, and we may overturn a judgment only if it is so against the great weight and preponderance of the evidence as to be clearly wrong and manifestly unjust." Lugo, 2008 WL 4823163, at *2 (citing Cain v. Bain, 709 S.W.2d 175, 176 (Tex. 1986)).

         After Hutchins moved into unit 106, his behavior became increasingly disruptive of the Swede Hill community. Both Smith and Hutchins were confronted about Hutchins' numerous infractions, including loud music, noxious odors, loud talking, loud disturbances with guests, parking in other people's spots, parking in unmarked areas, police activity at the unit, trash on the walkway by the door, guests who arrived at all hours of the night, and a guest who stole property from another resident.

         In March 2011, Smith received a warning from the HOA by e-mail and certified mail regarding listed grievances and was informed, "The Board voted to establish a fine if, after 30 days from this notice, any of these grievances occur again. The First occurrence fine is $500-the second occurrence fine is $1000." The notice referenced Section 3.05 of the Declaration, which provides that "the Owner may request a written hearing before the Board within thirty (30) days of the notice." Smith testified that she received the e-mail notice and that, if the notice was sent to her by certified mail, her secretary would have given it to her. Smith did not request a hearing before the board to contest the fines.

         Hageman testified that the board conducted a telephone meeting before the letter was mailed. He explained that the fines were not initially imposed because Hutchins indicated that he intended to move. By January 2012, neither had Hutchins moved nor had the infractions ceased. To address the continued infractions, the board conducted a meeting by telephone conference to determine if the board wanted to "go ahead and actually demand payment for the fines." Each of the board members was on the telephone conference at the same time. The board consisted of Hageman, Glover, and Vipul Patel. All voted to demand payment for the $500.00 fine, although Glover did not vote to demand payment for the $1, 000.00 fine.[10]

         As previously discussed, a board meeting may be held telephonically, if "each director may hear and be heard by every other director." Tex. Prop. Code Ann. § 82.108(c)(1)(B). Telephonic board meetings were also authorized by Section 12.01 of the HOA bylaws ("[A]ll persons participating in the meeting [must] hear each other."). During the board's meeting by conference call, each of the members was on the call at the same time. This satisfies the requirements of Section 182.108(c)(1)(B), as well as the similar requirement of Section 12.01 of the bylaws. We find that this ...

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