Court of Appeals of Texas, Twelfth District, Tyler
RONALD RODDY, JAY BLINT, PATSY JONES, KENNETH MANGHAM AND SHONNA L. MULKEY, Appellants
HOLLY LAKE RANCH ASSOCIATION, INC., Appellee
from the 402nd District Court of Wood County, Texas Tr.Ct.No.
consisted of Worthen, C.J., Hoyle, J., and Neeley, J.
Roddy, Jay Blint, Patsy Jones, Kenneth Mangham, and Shonna L.
Mulkey (collectively Appellants) appeal the trial court's
declaratory summary judgment and award of attorney's fees
rendered in favor of Appellee Holly Lake Ranch Association,
Inc. Appellants raise three issues on appeal. We reverse and
render in part, remand in part, and affirm in part.
Lake Ranch is a planned community with multiple subdivisions
located in Wood County, Texas. Its amenities include a golf
course, a clubhouse, and a restaurant. The community has
grown in phases since it originated and, now, has thirty-two
subdivisions, each with its own deed restrictions.
Holly Lake Ranch Association (HLRA) is an incorporated
nonprofit entity that serves as the homeowners'
association for the community. According to its articles of
incorporation, HLRA was formed for the purpose of
"holding, maintaining[, ] and developing the common or
recreational facilities which have been installed or are to
be installed for the beneficial use and enjoyment of the
owners of lots" in the community. The articles further
set forth HLRA's purposes as "charging fees and
assessments of the members of the corporation for any
purpose" and "adopting such rules and regulations
for the use of property held by the corporation as may be
necessary." Each owner in the community is required to
be a member of HLRA and is subject to its
bylaws in addition to the deed restrictions of
the subdivision in which the lot is located.
bylaws set forth its purpose of facilitating the fulfillment
of the purposes provided in HLRA's articles of
incorporation and state that they are subject to the deed
restrictions. The bylaws further set forth that member voting
rights follow the rule of one vote per member regardless of
the number of lots owned. But the bylaws also specify that in
a property owner vote to amend deed restrictions, the rule
stated in the deed restrictions of one vote per lot owned
shall be followed.
bylaws set forth the authority of HLRA's board of
directors, in pertinent part, as follows:
The business and affairs of the association shall be managed
by its Board of Directors, who may exercise all such powers
of the Association and do all such lawful acts as are
permitted by the Texas Business Organizations Code, the Texas
Property Code, other governing statutes, the Articles of
Incorporation, the Deed Restrictions, and these Bylaws,
subject however, to the prohibitions stated herein. The board
of directors may not[, ] . . . without the approval of
fifty-one percent (51%) of the members voting in a binding
referendum [impose] [a]ssessments of any kind.
bylaws further place the authority in the board of directors
to alter, amend, or repeal the bylaws, subject to the
members' right to modify or divest the board of directors
of this authority by a majority vote.
instant case concerns amendments to the deed restrictions
passed in several of the subdivisions. Paragraph 18 of the
deed restrictions sets forth, in pertinent part, as follows:
[M]embership shall also be conditioned upon payment, when
due, of such dues, fees, and maintenance charges as the
Association shall find necessary for the maintenance of the
Association facilities and services, including but not
limited to the maintenance of lanes, roads, parks, club house
and lakes and any other services and benefits which said
Association may provide for the benefit of the lots,
Association facilities, and Members.
18 further sets forth that members are to be subjected to an
annual fee and maintenance charge per lot, which is secured
by a vendor's lien on the lot. It further states that the
developer may waive, either temporarily or permanently, the
fee and maintenance charge against any lot or tract if its
owner has purchased another lot or tract within the
subdivision which is subject to such charges.
Paragraph 26(c) of the deed restrictions sets forth as
Any or all of the restrictions, covenants[, ] and conditions
herein contained may be repealed, amended[, ] or modified at
any time by a majority vote of the lot owners in the
Subdivision, each then existing lot entitling its owner to
one(1) vote. Such repeal, amendment[, ] or modification shall
be effected by an instrument in writing executed by such
majority of said lot owners, and filed of record in the
Office of the County Clerk of Wood County, Texas.
2014 and 2017, property owners from multiple subdivisions
voted to amend their respective deed restrictions. Although
the outcome and number of amendments varied by subdivision,
the resulting amendments relevant to this matter are
summarized as follows:
• Addition of a 51% voting requirement for dues,
assessments, or fees.
• Confirms that each lot entitles owner to one vote.
• Provides mandatory waiver of duplicate dues, fees,
and/or assessments for additional lots. Waiver applies to
subsequent buyers with multiple lots.
• Amount of monthly dues changed.
• Restricts lien to dues, fees, or assessments for
construction or repair.
filed the instant suit on August 30, 2017, seeking a
declaratory judgment that the amendments are void. It further
alleged breach of contract and sought monetary relief,
injunctive relief, and attorney's fees. Thereafter, it
filed a traditional motion for summary judgment, to which
trial court granted HLRA's motion for summary judgment
and, ultimately, rendered a declaratory judgment that (1) the
amendments to the subdivision restrictions at issue are void
and of no further legal effect and (2) votes cast by members
of the Holly Lake Ranch subdivision members in the future
will be allocated as follows: "each member who owns a
lot is entitled to one vote, regardless of how many lots that
member might own, and regardless of how many persons, or
entities, might share the ownership rights to that
member's lot." The trial court also awarded
attorney's fees to HLRA. This appeal followed.
their first issue, Appellants argue that the trial court
erred in granting summary judgment in favor of HLRA and
rendering a declaratory judgment that the amendments at issue
are void. In their second issue, Appellants argue that the
trial court erred in granting summary judgment in favor of
HLRA and rendering a declaratory judgment that the deed
restrictions allocated votes for an amendment at one vote per
member regardless of the number of lots owned by that member.
prevail on a traditional Rule 166a(c) summary judgment
motion, a movant must prove that there is no genuine issue
regarding any material fact and that it is entitled to
judgment as a matter of law. See Tex. R. Civ. P.
166a(c); Little v. Tex. Dep't of Criminal
Justice, 148 S.W.3d 374, 381 (Tex. 2004). A plaintiff
moving for a traditional summary judgment must conclusively
prove all essential elements of its claim. See
Rhone-Poulenc, Inc. v. Steel, 997 S.W.2d 217, 223 (Tex.
appeal, we review de novo a trial court's summary
judgment ruling. See Mann Frankfort Stein & Lipp
Advisors, Inc. v. Fielding, 289 S.W.3d 844, 848 (Tex.
2009). In our review, we consider all the evidence in the
light most favorable to the nonmovant, crediting evidence
favorable to the nonmovant if reasonable jurors could, and
disregarding contrary evidence unless reasonable jurors could
not. See Mack Trucks, Inc. v. Tamez, 206 S.W.3d 572,
582 (Tex. 2006); English v. B.G.P. Int'l, Inc.,
174 S.W.3d 366, 370 (Tex. App.-Houston [14th Dist.] 2005, no
reviewing a declaratory judgment, we refer to the procedure
for resolution of the issue at trial to determine the
applicable standard of review on appeal. See Tex.
Civ. Prac. & Rem. Code Ann. § 37.010 (West 2015);
English, 174 S.W.3d at 370; see also Gen. Agents
Ins. Co. of Am. v. El Naggar, 340 S.W.3d 552, 557 (Tex.
App.-Houston [14th Dist.] 2011, pet. denied). Here, because
the trial court resolved the declaratory judgment issues by
ruling on motions for summary judgment, we review the
propriety of the trial court's grant of the declaratory
judgment under the same standards applicable for review of
summary judgments. See English, 174 S.W.3d at 370.
Therefore, we must determine whether the trial court properly
granted HLRA's declaratory judgment requests and, if not,
render the judgment which should have been rendered by the
trial court. See id.
of Section 26(c)
first consider whether the trial court correctly construed
Section 26(c). A restrictive covenant is a contractual
agreement between the seller and the purchaser of real
property. Ski Masters of Tex., LLC v. Heinemeyer,
269 S.W.3d 662, 667 (Tex. App.-San Antonio 2008, no pet.).
When construing a restrictive covenant, appellate courts
apply general rules of contract construction. Pilarcik v.
Emmons, 966 S.W.2d 474, 478 (Tex. 1998); Ski
Masters, 269 S.W.3d at 668. Covenants are examined as a
whole in light of the circumstances present when the parties
entered into the agreement. Ski Masters, 269 S.W.3d
at 667. The reviewing court's primary intent is to
ascertain and give effect to the true intention of the
parties as expressed in the instruments. Owens v.
Ousey, 241 S.W.3d 124, 129 (Tex. App.-Austin 2007, pet.
denied). A restrictive covenant should be liberally construed
"to give effect to its purposes and intent." Tex.
Prop. Code Ann. § 202.003(a) (West 2014). A trial
court's construction of a restrictive covenant is
reviewed de novo. Owens, 241 S.W.3d at 129.
forth previously, Section 26(c) states, in pertinent part,
that any of the restrictions may be amended by a majority
vote of the lot owners in the subdivision, each then
existing lot entitling its owner to one vote. Appellants
argue that this italicized clause means that, for example, if
someone owns three lots in the subdivision, that person is
entitled to three votes regarding a proposed amendment to the
deed restrictions. On the other hand, HLRA contends that this
language is intended to address only a situation wherein a
lot has multiple owners and to restrict each lot to one vote,
regardless of the number of lot owners. But the mere fact
that the parties disagree about its meaning does not make an
otherwise straightforward instrument ambiguous. See
Transcon. Gas Pipeline Corp. v. Texaco, Inc., 35 S.W.3d
658, 665 (Tex. App.-Houston [1st Dist.] 2000, pet. denied).