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Drexel v. Toll Brothers, Inc.

Court of Appeals of Texas, Fifth District, Dallas

August 28, 2019

WILLIAM DREXEL AND SANDY DREXEL, Appellant
v.
TOLL BROTHERS, INC. AND TOLL DALLAS TX LLC, Appellee

          On Appeal from the 296th Judicial District Court Collin County, Texas Trial Court Cause No. 296-03255-2012

          Before Justices Schenck, Osborne, and Reichek

          MEMORANDUM OPINION

          DAVID J. SCHENCK JUSTICE.

         Appellants, William and Sandy Drexel, appeal a final judgment, incorporating and restating the trial court's numerous rulings by interlocutory summary judgment, in a dispute over residential building covenants and restrictions in a development known as Avignon. The Drexels purchased a lot in Phase 2 of the development from Windhaven Development, Ltd. ("Windhaven") and built a patio home on their lot. Subsequently, Windhaven purchased property that would become Phase 3 of the development and conveyed the Phase 3 property to appellees, Toll Brothers, Inc. and Toll Dallas TX LLC (collectively, "Toll"). Toll built estate homes in Phase 3, some of which abutted the Drexels' property. The Drexels' complaints center on second story rear windows of the estate homes that abut their property. They claim that, in violation of the applicable covenants and restrictions, those windows have views directly into their backyard pool and spa area and master bedroom. In two issues, the Drexels claim the trial court erred in interpreting the documents that govern the development and in awarding Toll attorney's fees. We affirm in part, and reverse in part, the summary judgment. Because all issues are settled in law, we issue this memorandum opinion. Tex.R.App.P. 47.4.

         Background

         In April 2005, Windhaven purchased 33.001 acres of unimproved land located in the City of Plano that would ultimately become Phase 1 of the Avignon development. In doing so, Windhaven executed a Special Warranty Deed with Vendor's Lien (the "2005 Deed") and, by an appendix, agreed that homes built on the property would be subject to certain architectural guidelines. For example, homes in the development had to conform to the French Country or European style, gutters were to be molded from copper or paint grip metal, and all front windows had to be finished wood casements or wood divided light windows.

         In March 2006, Windhaven recorded a Declaration of Covenants, Conditions and Restrictions for Avignon ("2006 Declaration"). The 2006 Declaration expressed Windhaven's intent to develop the land as a single-family residential subdivision consisting of ninety-nine patio homes, constituting Phase 1 of the Avignon development. Windhaven also recorded architectural design guidelines in connection with the 2006 Declaration that were consistent with the 2005 Deed.

         The 2006 Declaration included a provision allowing Windhaven to amend the Declaration without the joinder or consent of any other party, "provided that any such amendment shall be consistent with and in furtherance of the general plan and scheme of development as evidenced by this Declaration and shall not impair or affect the vested property or other rights of any owner or his mortgagee." The 2006 Declaration also envisioned the acquisition of more property to expand the Avignon development:

. . . Declarant, in its sole discretion and without the approval of any other party, may from time to time subject this Declaration to additional real property by recording in the Real Property Records of Collin County, a Supplemental Declaration describing the additional real property to be subjected to this Declaration. Any such Supplemental Declaration which is executed by Declarant or its assignee and recorded in the Real Property Records of Collin County shall not require the consent or approval of any other Owner or other person in order to be fully enforceable and effective to cause such additional real property to be incorporated herein. Such changes in the covenants, conditions, and restrictions of this Declaration and the Bylaws as may be desired with reference only to the subsequent phase or phases may be included in the Supplemental Declaration. Nothing in this Declaration shall be construed to require Declarant or any successor of Declarant to subject additional real property to this Declaration.

         In October 2008, while Phase 1 construction was underway, Windhaven acquired an additional 1.625 acres abutting Phase 1. That acquisition became Phase 2 of the Avignon development. The deed conveying that property (the "2008 Deed") subjected the property to the same written Architectural Guidelines as the 2005 Deed. Phase 2 was thus to be developed in the same manner as Phase 1. Specifically, the homes in Phase 2 would also be "patio homes," also known as zero-lot-line homes, in which the homes are built on or near at least one neighboring property line with minimal separation between residences.

         In October 2009, Windhaven recorded an Amended and Restated Declaration of Covenants, Conditions and Restrictions for Avignon ("2009 Declaration"). The 2009 Declaration stated Windhaven's intent "to establish covenants, conditions and restrictions upon the Avignon Windhaven Property and each and every Lot contained therein, in order to maintain a general plan for the development." The 2009 Declaration described the supplemental declaration referenced in the 2006 Declaration's provision as: "a recorded instrument which accomplishes one or more of the following purposes: (i) subjects additional real property to this Declaration, or (ii) imposes, expressly or by reference, additional restrictions, covenants, easements and/or obligations on the land described." It also reiterated a set of window restrictions that appeared in the 2005 Deed and in the 2006 Declaration:

1. Second story windows shall be located so as to restrict views into adjacent windows and/or courtyards . . . .
2. Second story rear and side yard windows are restricted except on those Lots that back to a greenbelt or open area.
3. Second story clear windows are permitted on the restricted side provided that second story walkways, balconies, catwalks, etc. have limited or no impact to adjacent properties.
4. The window restrictions are intended to minimize and eliminate view encroachments.
5. Translucent windows to include glass block or other obscure window types will be considered on restricted elevations . . . .

         In January 2010, the Drexels purchased a lot from Windhaven in Phase 2 of the Avignon development. Construction of their home was completed in September 2010.

         In February 2011, Windhaven acquired by Special Warranty Deed (the "2011 Deed") roughly thirty-two acres of unrestricted and unimproved land adjacent to the Avignon development. Thus, this acquisition was not subject to any of the architectural guidelines that governed the Avignon development at that time. However, Windhaven recorded a Supplemental Declaration to the Amended and Restated Declaration of Covenants, Conditions and Restrictions for Avignon (the "2011 Declaration"), which encumbered the entirety of the land conveyed by the 2011 Deed. The 2011 Declaration established Architectural Guidelines applicable to Phase 3 only. In addition, in contrast to the development of zero-lot-line patio homes in Phases 1 and 2, Windhaven decided to develop Phase 3 into estate homes situated on lots twice the size of those in Phases 1 and 2. The Architectural Guidelines applicable to Phase 3 included the following window restrictions:

1. Second story rear windows are restricted on those Lots that back to Phase 2.
2. Second story clear windows are permitted on the restricted side provided such windows are on second story walkways, balconies, catwalks, etc. and such windows have limited or no visual impact to adjacent properties.
3. The window restrictions are intended to minimize and eliminate view encroachments
4. Translucent windows to include glass block or other obscure window types will be considered on restricted elevations

         Thus, while Phases 1 and 2 were subject to five window restrictions, Phase 3 was subject to only four.

         Toll subsequently purchased the land designated for Phase 3 from Windhaven. In 2012, Toll began building homes on the street that abuts the Drexels' property. Those homes had second-story rear windows that had clear glass and faced the Dexels' backyard.

         In August 2012, the Drexels asserted claims against Toll for breach of the restrictive covenants, invasion of privacy, and sought declaratory and injunctive relief. In their breach of covenant claim, the Drexels specifically alleged: (1) they had contractual "privacy rights" arising from the covenants and restrictions established in the 2005 Deed, the 2006 Declaration, the 2009 Declaration, and the 2011 Supplemental Declaration; (2) the 2009 Declaration governed Phase 3 and Toll had violated the Restrictions in the 2009 Declaration and in associated documents setting forth the general plan for the development; (3) the Restrictions in the 2011 Supplemental Declaration were void as impermissible amendments to the 2009 Declaration-or, if not void, they applied in addition to the restrictions in the 2009 Declaration and were independently breached; (4) Toll had installed windows and other features in homes that backed to the Drexels' property that violated the Restrictions in the 2009 Declaration; and (5) the rear windows also violated the Window Restrictions in the 2011 Supplemental Declaration insofar as those restrictions operated independent of the 2009 declaration.

         Toll answered, denied liability, and asserted a counterclaim under the Uniform Declaratory Judgment Act (UDJA), by which it asked the trial court to declare: (1) that the 2006 Declaration did not apply to any lot in Avignon; (2) that the Restrictions in the 2009 Declaration did not apply to Phase 3; (3) that only the Restrictions in the 2011 Supplemental Declaration applied to Phase 3; and (4) that the rear-facing ...


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