Douglas B. Moseley v. Sherrie Arnold

ACCEPTED
06-15-00031-CV
SIXTH COURT OF APPEALS
TEXARKANA, TEXAS
11/4/2015 4:14:37 PM
DEBBIE AUTREY
CLERK
No. 06-15-00031-CV
IN THE FILED IN
6th COURT OF APPEALS
COURT OF APPEALS FOR THE TEXARKANA, TEXAS
SIXTH SUPREME JUDICIAL DISTRICT OF TEXAS
11/4/2015 4:14:37 PM
AT TEXARKANA, TEXAS DEBBIE AUTREY
Clerk
DOUGLAS B. MOSELEY,
Appellant,
vs.
SHERRIE ARNOLD,
Appellee.
Appeal from the 71st District Court
of Harrison County, Texas
Honorable Brad Morin
APPELLEE’S BRIEF
Appellee respectfully requests oral argument only if Appellant’s request for
oral argument is granted.
i
TO THE HONORABLE COURT OF APPEALS:
Sherrie Arnold (the “Appellee”) files this Appellee’s Brief in response to
Douglas B. Moseley’s (the “Appellant”) Appellant’s Brief filed in this Court on the
11th day of September, 2015.
ii
TABLE OF CONTENTS
INDEX OF AUTHORITIES .................................................................................. iv
STATEMENT REQUESTING ORAL ARGUMENT ............................................. 1
ISSUES PRESENTED ............................................................................................. 2
STATEMENT OF FACTS ....................................................................................... 3
Appellant’s Sale of the Five (5) Acres .......................................................... 3
The Restrictive Covenant .............................................................................. 3
Chain of Title Into Appellee .......................................................................... 4
SUMMARY OF THE ARGUMENT ....................................................................... 5
ARGUMENT AND AUTHORITIES ...................................................................... 7
The Court Must Uphold the December Summary Judgment on Any Ground
Asserted by Appellee that is Supported by Evidence and Pleadings ............ 7
Appellee Has the Right to Enforce the Restrictive Covenant ....................... 7
The Doctrine of Changed Circumstances Does Not Apply as a
Matter of Law .............................................................................................. 13
Appellant Presented No Evidence of Changed Circumstances ................... 17
To the Extent Waiver and Abandonment are Properly Before the Court,
Waiver and Abandonment Do Not Apply as a Matter of Law.................... 17
Appellant’s Claim for Breach of the Contract of Sale Fails for Multiple
Reasons ........................................................................................................ 19
SUMMARY............................................................................................................ 22
PRAYER ................................................................................................................ 22
iii
INDEX OF AUTHORITIES
Cases
Abernathy v. Adoue, 49 S.W.2d 476 (Tex. Civ. App.—Beaumont 1932) ........................ 14
Anderson v. New Property Owners’ Assn’ of Newport, Inc., 122 S.W.3d 378, 384-85
(Tex. App.—Texarkana 2003, pet. denied) ..................................................................... 9
Aull v. Kraft, 286 S.W.2d 460, 461 (Tex. Civ. App.—Waco 1956, writ ref'd n.r.e.) ......... 9
Bethea v. Lockhart, 127 S.W.2d 1029 (Tex. Civ App.—Amarillo 1939, writ ref’d) ....... 13
Carr v. Brasher, 776 S.W.2d 567, 569 (Tex. 1989) ............................................................ 7
Consol. Bearing & Supply Co. v. First Nat’l Bank, 720 S.W.2d 647, 650-51 (Tex. App.—
Amarillo, no writ) .......................................................................................................... 19
Cowling v. Colligan, 312 S.W.2d 943 (Tex. 1958) ............................................... 13, 15, 18
Dempsey v. Apache Shores Property Owners Ass'n, 737 S.W.2d 589, 597 (Tex. App.
Austin 1987, no writ) ............................................................................................... 13, 15
Draper v. Gochman, 400 S.W.2d 545, 548 (Tex. 1966) ............................................. 19, 20
El Chico Corp. v. Poole, 752 S.W.2d 306, 315 (Tex. 1987) ............................................... 7
Giles v. Cardenas, 697 S.W.2d 422, 427 (Tex. App.—San Antonio 1985, writ ref’d n.r.e.)
.......................................................................................................................................... 9
Girsh v. St. John, 218 S.W.3d 921, 923-924 (Tex. App.—Beaumont 2006, no pet.) ......... 9
Green Ave. Apartments v. Chambers, 239 S.W.2d 675 (Tex. Civ. App. – Beaumont 1951,
no writ) ............................................................................................................................. 9
Green v. Gerner, 289 S.W. 999, 1000 (Tex. Comm'n App. 1927) ..................................... 9
Overton v. Ragland, 54 S.W.2d 240 (Tex. Civ. App.—Amarillo 1933, writ dism’d) ...... 14
Ragland v. Overton, 44 S.W.2d 768 (Tex. Civ. App.—Amarillo 1931, no writ) ............. 14
Scaling v. Sutton, 167 S.W.2d 275, 278-9 (Tex. Civ. App. – Fort Worth 1942), writ
refused W.O.M. (May 26, 1943) .......................................................................... 9, 13, 15
iv
Strather v. Dolgen Corp. of Texas, Inc., 96 S.W.3d 420, 422-23 (Tex. App.—Texarkana
2002, no pet.). .................................................................................................................. 7
Statutes
TEX. CIV. PRAC. & REM. CODE § 16.051 .......................................................................... 21
TEX. PROP. CODE § 13.001. ............................................................................................... 19
TEX. PROP. CODE § 202.003. ............................................................................................. 10
v
STATEMENT REQUESTING ORAL ARGUMENT
Appellee respectfully requests oral argument only if Appellant’s request for
oral argument is granted.
1
ISSUES PRESENTED
I. The Trial Court correctly entered Final Judgment in favor of Appellee,
relying upon the November Partial Summary Judgment Order and the
December Partial Summary Judgment Order.
II. The Trial Court correctly entered the November Partial Summary
Judgment Order.
III. The Trial Court correctly entered the December Partial Summary
Judgment Order.
IV. An interested property owner who benefits from a restrictive covenant
has standing to enforce the restrictive covenant.
V. Appellant did not create an issue of fact under the doctrine of Changed
Circumstances.
2
STATEMENT OF FACTS
A. Appellant’s Sale of the Five (5) Acres
On July 31, 1985 Appellant entered into a Contract of Sale with Robert T.
Gorman for the sale of five acres and a truck stop (the “5 Acres”) located on the
southeast corner of Highway 43 and Interstate 20 in Harrison County, Texas.
(R.68-75). On or about September 16, 1985, Appellant conveyed his interest in a
five (5) acre tract of land with an existing and operational truck stop to Robert T.
Gorman and wife, Nancy S. Gorman (the “Gormans”). (R.79-81).
B. The Restrictive Covenant
One of the negotiated terms of the Contract of Sale was for a Restrictive
Covenant to be placed on a 6.379 acre tract of land (the “6.3 Acres”), located
across the Highway from the 5 Acres, restricting Appellant, his heirs,
administrators, successors and assigns from developing or using the 6.3 Acres as a
truck stop or fuel stop “to protect the value and desirability of the 5 acre tract or
parcel of land purchased by Robert T. Gorman….” (R.76-78). The Restrictive
Covenant restricted Appellant, his heirs, administrators, successors and assigns
from developing and using the 6.3 Acres as a truck stop and fuel stop “to protect
the value and desirability of the 5 acre tract or parcel of land purchased by Robert
T. Gorman…and such restriction shall run with the real property….” (R.76-78).
3
The restriction contained no limited term of duration. The Restrictive Covenant
further states that “such restriction shall run with the real property and be binding
on all parties having any right, title or interest in and to the [herein described 6.3
Acres].” (R.76-78).
Appellant now contends that the Restrictive Covenant is invalid despite
having negotiated for the restriction in the Contract of Sale, and having been
compensated $971,500 in 1985 for the sale of the 5 Acres and for placing the
restriction on his property. (R.82-95). Appellant has shown that a new deal has
come along that would now highly compensate him for the 6.3 Acres, and seeks to
remove the restriction on the 6.3 Acres so that he can be paid again, despite having
previously bargained for his current position. (R. 82-95).
C. Chain of Title Into Appellee
It is undisputed that Appellee is the owner of the fee with regard to the 5
Acres. Appellant’s Brief at P. 6.
4
SUMMARY OF THE ARGUMENT
Appellee has the right to enforce the Restrictive Covenant, as it is a covenant
running with the land benefitting the owner of the 5 Acres. As the owner of the 5
Acres at issue, Appellee has an interest in the property and the right to enforce it
pursuant to Texas law.
The Doctrine of Changed Circumstances, also called Changed Conditions, is
inapplicable to the facts of this case, as asserted by Appellant. The undisputed
facts are clear that Appellee derives a substantial benefit from the 5 Acres, and that
there have been no changes in the surrounding area that would make it so that
Appellee cannot secure a substantial degree of the benefits sought to be realized.
To the extent that Waiver or Abandonment were properly raised before this
Court, which Appellee contends they were not, there has been no violation of the
Restrictive Covenant as to amount to an abandonment of the covenant or a waiver
of the right to enforce it.
The facts and analysis set forth by Appellant regarding the circumstances
surrounding the alleged breach of the Contract of Sale are irrelevant, as no issue
regarding the transaction, including an alleged breach of contract, is properly
before this Court. Furthermore, the breach of contract argument fails by virtue of
the Statute of Limitations, the right of first refusal (being the provision alleged to
5
be breached) is only a personal covenant, and the right of first refusal was
unrecorded, and therefore void as to Appellee.
6
ARGUMENT AND AUTHORITIES
A. The Court Must Uphold the December Summary Judgment on Any
Ground Asserted by Appellee that is Supported by Evidence and
Pleadings
When the order granting summary judgment does not specify the particular
grounds the trial court sustained, the appellate court must uphold the summary
judgment on any ground asserted by the movant that is supported by the evidence
by the evidence and pleadings. Carr v. Brasher, 776 S.W.2d 567, 569 (Tex. 1989).
When the trial court does not specify on what basis it granted summary judgment,
the appellant must argue that every ground in the summary judgment motion is
erroneous. Strather v. Dolgen Corp. of Texas, Inc., 96 S.W.3d 420, 422-23 (Tex.
App.—Texarkana 2002, no pet.).
B. Appellee Has the Right to Enforce the Restrictive Covenant
The Restrictive Covenant serves two purposes. By the plain language of the
Restrictive Covenant, it is meant to (1) restrict the 6.3 Acres from the building of a
fuel or truck stop for the benefit of the 5 Acres, and (2) be for the benefit of the
Gormans, and their successors and assigns (the current successor is Appellee).
(R76-78). Without any authority, Appellant would have this Court believe that
because the Restrictive Covenant was not assigned, and despite the fact that the
Appellee was the successor in interest to the Gormans’ ownership of the benefitted
7
5 Acres, the Restrictive Covenant terminated upon the first sale of the 5 Acres that
occurred after the initial sale from Moseley to the Gormans.
It is undisputed that the Restrictive Covenant in question is one running with
the land.1
The Restrictive Covenant is clearly intended to protect both the 5 acres in
question and Appellee. The Restrictive Covenant, in pertinent part, reads as
follows:
...[F]or the benefit of Robert T. Gorman and wife, Nancy S. gorman
(sic), and their successors and assigns, and to bind Douglas B.
Moseley and his heirs, administrators, successors and assigns, the said
Douglas B. Moseley declares that the aforementioned 6.379 acre tract
or parcel of land may not be developed and used as a truck stop and
fuel stop to protect the value and desirability of the 5 acre tract or
parcel of land purchased by Robert T. Gorman and wife, Nancy S.
gorman (sic), from said Douglas B. Moseley, and such restriction
shall run with the real property and shall be binding on all parties
having any right, title or interest in and to the above-described 6.379
acre tract or parcel of land.
(R.76-78). The plain language of the Restrictive Covenant shows that said
restriction was made to protect the value and desirability of the 5 Acres.
As Appellant sets forth in his brief, a suit for the enforcement of a restrictive
covenant is maintainable only by one for whose benefit the covenant was intended.
1
Appellant, by virtue of his briefing in both the Trial Court and Appellant’s Brief, has
admitted that the Restrictive Covenant is a covenant running with the land; therefore, Appellee
will reserve briefing that issue. To the extent it is necessary, Appellee would direct the Court to
Defendant’s Response to Appellant’s Motion for Partial Summary Judgment in the Trial Court
for extensive briefing on the covenant running with the land issue, and in the alternative, requests
leave for additional briefing on the merits if required by this Court.
8
Scaling v. Sutton, 167 S.W.2d 275, 278-9 (Tex. Civ. App. – Fort Worth 1942), writ
refused W.O.M. (May 26, 1943); Green Ave. Apartments v. Chambers, 239 S.W.2d
675 (Tex. Civ. App. – Beaumont 1951, no writ); Aull v. Kraft, 286 S.W.2d 460,
461 (Tex. Civ. App.—Waco 1956, writ ref'd n.r.e.); Green v. Gerner, 289 S.W.
999, 1000 (Tex. Comm'n App. 1927).
Because the Restrictive Covenant was to protect the value and desirability of
the 5 Acres, it is clear that the party to be benefited by the covenant is the owner of
the 5 Acres. Unless a restrictive covenant has been removed by agreement of all
interested property owners or by declaratory judgment, it may be enforced by any
interested property owner. Giles v. Cardenas, 697 S.W.2d 422, 427 (Tex. App.—
San Antonio 1985, writ ref’d n.r.e.); see Girsh v. St. John, 218 S.W.3d 921, 923-
924 (Tex. App.—Beaumont 2006, no pet.); Anderson v. New Property Owners’
Assn’ of Newport, Inc., 122 S.W.3d 378, 384-85 (Tex. App.—Texarkana 2003, pet.
denied) (property owner may sue to enforce restrictive covenant).
Any person entitled to benefit under a restrictive covenant may enforce it.
Anderson, 122 S.W.3d at 384. In the case at hand, a tract of land purchased by the
Gormans, the 5 Acres, and the successors to the Gormans’ interest, were intended
to benefit from the Restrictive Covenant. The Restrictive Covenant specifically
states that the restriction placed on the 6.3 Acres prohibiting development or use of
9
the 6.3 Acres for a truck stop and fuel stop is “to protect the value and desirability
of the [5 Acres].” (R.76-78)
As a successor in ownership to the 5 Acres, Appellee is an interested
property owner in the 5 Acres to be benefitted from the restriction, and is therefore
entitled to enforce the Restrictive Covenant placed upon the 6.3 Acres. Appellee is
a successor to the Gormans’ interest in the 5 Acres, as admitted by Appellant,
which is exactly the type of beneficiary the restriction contemplated by its very
terms. The Restrictive Covenant is a validly recorded document that was
negotiated for, by, and between Gorman and Appellant. Appellant received
consideration for the restriction, and then placed the restriction on his property.
Appellant admits that the Restrictive Covenant is clear and unambiguous as to the
beneficiaries of said restriction, and the successors to the Gormans’ interest in the
5 Acres, including Appellee, are those that the Restrictive Covenant is
unambiguously intended to protect.
A Restrictive Covenant shall be liberally construed to give effect to its
purpose and intent. TEX. PROP. CODE § 202.003. Appellant asserts that the term
“successor” in the Restrictive Covenant can only mean one who is conveyed the
Restrictive Covenant itself. Appellant’s only analysis to the Trial Court in this
regard was a conclusory statement that “‘successor can only mean a party who
succeeds to the Restrictive Covenant” because the Warranty Deed does not
10
mention the Restrictive Covenant. Appellant completely fails to direct this Court
to the other language contained in the Restrictive Covenant that expressly sets
forth that the restriction is being placed on the property per the Contract of Sale for
the 5 Acres to Gorman. It is obvious, by the plain language of the Restrictive
Covenant, that the restriction is in consideration for the purchase of the 5 Acres to
which Appellee succeeded into ownership. The fact that Appellant intended to
restrict his property in consideration of the purchase of the 5 Acres is clear and
unambiguous. The Restrictive Covenant even states that the restriction is “in
partial consideration of the Contract of Sale….” The clear intent of the parties was
to restrict the 6.3 Acres in favor of the 5 Acres, and in return, Appellant was fairly
compensated for the sale and restriction.
Appellee also directs the Court to the terms of the Warranty Deed under
which she took title to the 5 Acres. Said Warranty Deed, attached hereto as
Appendix A, and recorded at Document Number 2010-000014396, includes a
conveyance of the 5 Acres, “together with all and singular the rights and
appurtenances thereto….” Therefore, the right to enforce the Restrictive Covenant
was necessarily conveyed to Appellee upon her purchase by virtue of the terms of
the Warranty Deed which conveyed the 5 Acres to her.
Appellee wishes to make sure the Court is aware that the Restrictive
Covenant has served the exact purpose it was intended for in this case. Appellant
11
restricted himself, his successors and assigns from building a truck stop on the 6.3
Acres. Upon attempting to violate the Restrictive Covenant by selling his interest
in the 6.3 Acres for the building of a truck stop, the title company located the
Restrictive Covenant, and informed Appellant that it had to be released in order to
proceed. (R.65).
Appellant’s assertion that the Deed Restriction itself had to be conveyed is
simply incorrect, and would cause a domino effect of consequences for Texas
subdivisions and zoning. Restrictive Covenants, sometimes referred to as
Covenants, Conditions and Restrictions by residential subdivisions, are filed in the
Official Public Records of the county in which the property is located. Those
restrictions do not have to be amended or transferred and updated every time a new
homeowner purchases property within the subdivision. Appellant asks this Court
to enforce a remedy that would require all filed restrictions to be specifically
conveyed by the benefitted party to a successor in interest, which is not the purpose
of restrictive covenants in general. The purpose is to restrict property from certain
uses for the benefit of, or in favor of, another property or a subdivision as a whole.
The covenant runs with the restricted land, and the benefitted land. To suggest that
such restrictions are not valid unless specifically conveyed by the benefitted
property owner would frustrate the entire purpose of restrictive covenants because
under Appellant’s unsupported argument, the failure to specifically convey the
12
restriction would effectively terminate the restrictive covenant. Appellant has
provided no law to support such an argument, Appellant has only provided his
incomplete argument as to what he believes the Restrictive Covenant states.
C. The Doctrine of Changed Circumstances Does Not Apply as a Matter of
Law
The doctrine of Changed Circumstances, also called “Changed Conditions”
has most uniformly been used in the case of residential restrictions in subdivisions.
The law stands for the fact that equity demands a release of restrictive covenants
when changes in the restricted area or the immediately surrounding area make it so
that it is no longer possible to secure to a substantial degree the benefits sought to
be realized by the owner. Dempsey v. Apache Shores Property Owners Ass’n, 737
S.W.2d 589, 597 (Tex. App. Austin 1987, no writ) (citing Cowling v. Colligan, 312
S.W.2d 943, 946 (Tex. 1958)).
Appellant has set forth, in his Appellant’s Brief and his Motion for Partial
Summary Judgment in the Trial Court that the change must be so radical as to
render perpetuation of the restriction of no substantial benefit to the dominant
estate, and the original purpose of the restriction has been defeated. Appellant’s
Brief P. 17; citing Cowling, 312 S.W.2d 943; Scaling v. Sutton, 167 S.W.2d 275
(Tex. Civ. App.—Fort Worth 1942, writ ref’d w.o.m.); Bethea v. Lockhart, 127
13
S.W.2d 1029 (Tex. Civ App.—Amarillo 1939, writ ref’d); Overton v. Ragland, 54
S.W.2d 240 (Tex. Civ. App.—Amarillo 1933, writ dism’d); Abernathy v. Adoue,
49 S.W.2d 476 (Tex. Civ. App.—Beaumont 1932, no writ.); Ragland v. Overton,
44 S.W.2d 768 (Tex. Civ. App.—Amarillo 1931, no writ).
It is undisputed that Appellant’s 6.3 Acres has not been used in violation of
the Restrictive Covenant and in fact, Appellant currently seeks to sell the 6.3 Acres
that is restricted for a purpose in violation of the restriction, namely a truck stop or
fuel station. (R.65, 82-95). Arnold’s Affidavit in Support of Plaintiff’s Motion for
Partial Summary Judgment in the Trial Court (“Arnold’s Affidavit”), further shows
that no truck and fuel stop has been placed on the 6.3 Acres since the time of the
sale to Gorman. (R.166). Appellant’s contention that the 5 Acres has not been used
as a truck stop since a fire occurred at the one owned by Gorman has no bearing on
the benefit to Appellee.
Appellant has set forth, in Appellant’s Brief, and Motion for Partial
Summary Judgment in the Trial Court, that certain events constitute changed
circumstances which would render the restriction unenforceable. Appellant’s Brief
at P. 19-20. The listed circumstances, allegedly caused by the owners of the 5
Acres, are: 1) allowing foreclosure of the property; 2) not specifically assigning the
Restrictive Covenant to any of the 6 subsequent purchasers; 3) allowing a fire to
occur at the truck stop; 4) not rebuilding the truck stop after it burned down; and 5)
14
allowing the remaining portions of the truck stop, including buildings,
underground tanks, etc., to all be torn down and removed. Appellant’s Brief P. 20.
None of these circumstances fulfill the law set forth above. Specifically, the law
sets forth the proposition that changes in the restricted area or the immediately
surrounding area must make it so that it is no longer possible to secure to a
substantial degree the benefits sought to be realized by the owner. See Dempsey,
737 S.W.2d at 597 (citing Cowling, 312 S.W.2d at 946 (1958)). Furthermore, the
changes are not so radical as to render perpetuation of the restriction of no
substantial benefit to the dominant estate, or defeat the subject or purpose for the
reasons set forth herein. See Scaling, 167 S.W.2d at 275.
Even if the facts asserted by Appellant are taken as true, the alleged changed
conditions are such that the Trial Court was free to decide upon those matters as a
matter of law, based, inter alia, on Cowling v. Colligan, 312 S.W.2d 943 (Tex.
1958). The actions or inactions of the owners of the 5 Acre lot are not of the type
that inhibit or prohibit the 5 Acres from being made into a truck stop or fuel stop.
The lot is currently vacant, and there is nothing that prevents the property from
being used as a truck stop once again. None of the owners of the 5 Acres have
restricted it from being used as a truck stop, and none of the owners have taken any
action that would be the basis of determining that the 5 Acres is no longer fit for
use as such.
15
Appellee derives a substantial benefit from the restriction in that she owns a
piece of property fit for a truck stop, and she has no competition directly across the
street because Appellant sold that right when he bargained for the restriction. As
stated above, Appellant’s contention that the 5 Acres has not been used as a truck
stop since a fire at the one owned by Gorman has no bearing on the benefit to
Appellee. Obviously the right to build such a business on the property is valuable,
otherwise Appellant would not have sold the right, along with the business, for
$971,500 in 1985, nor would he have been recently offered $850,000 for his 6.3
Acres directly across the street to be used as a truck stop. (R.65, 82-95). The law
regarding changed circumstances sets forth that the changes must render the
restriction of no substantial benefit to Appellee, and any argument that Appellee
currently gains no benefit from the Restrictive Covenant is simply untrue. The
benefit of the restrictive condition has been established by the facts of this case, as
Appellant is unable to sell the 6.3 Acres for use as a truck stop for $850,000, and
Appellee retains exclusivity between the two tracts for such use.
Finally, with regard to the benefit derived by Appellee, Appellant admits in
Appellant’s Brief that Appellee derives an advantage from the Restrictive
Covenant, and that the Restrictive Covenant has protected the 5 Acres for over 20
years. Appellee’s Brief at P. 7 (citing R.65).
16
Therefore, as a matter of law, changed circumstances does not apply to the
facts at hand.
D. Appellant Presented No Evidence of Changed Circumstances
Appellant requests that this Court find that questions of material fact exist
with regard to the doctrine of Changed Circumstances; however, Appellee would
show that all facts alleged to support Appellant’s argument in this regard, even if
taken as true, are not sufficient to create a fact issue on Changed Circumstances.
On the basis of the law presented in Section “C”, above, the facts presented by
Appellant in the Trial Court do not render the restriction to be of no substantial
benefit to Appellee, for the reasons set forth at length in Section “C”. Appellant
does not, and cannot, point this Court to any evidence in the record that would be
sufficient to create a fact issue; therefore, the Court’s December Judgment should
be upheld with regard to the Changed Circumstances argument.
E. To the Extent Waiver and Abandonment is Properly Before the Court,
Waiver and Abandonment Do Not Apply as a Matter of Law
While Appellee contends that Waiver and Abandonment are not properly
raised by Appellant in his Appellant’s Brief, the argument by Appellant with
regard to Changed Conditions includes argument that Appellee waived or
17
abandoned the benefit the Restrictive Covenant conferred. Therefore, to the extent
properly raised, Appellee sets forth that Waiver and Abandonment do not apply as
a matter of law, and that there is no evidence of Waiver or Abandonment.
Once again, the doctrine of waiver or abandonment has most uniformly been
used in cases regarding residential restrictions. Waiver or abandonment in those
cases occurs when there has been an acquiescence of the lot owners in such
substantial violations within the restricted area as to amount to an abandonment of
the covenant or a waiver of the right to enforce it. Cowling, 312 S.W.2d at 461-62.
In the case at hand, Plaintiff has presented no proof, nor could there be any proof,
that there has been any violation of the restrictive covenant. As shown in Affidavit
of Sherrie Arnold, there has been no truck stop or fuel stop built on the 6.3 Acres
which would allow for an acquiescence argument. (R.166).
Therefore, as a matter of law, no waiver or abandonment of the Restrictive
Covenant has occurred.
Furthermore, Plaintiff has presented no evidence of waiver or abandonment
as there are no facts under which there has been acquiescence to a truck and fuel
stop being built on the 6.3 Acres, as would be required under the law as set forth
herein.
18
F. Appellant’s Claim for Breach of the Contract of Sale Fails for Multiple
Reasons
While Appellant does not specifically make the Contract of Sale an issue in
his Issues Presented, Appellant spends considerable time in his Statement of Facts
setting forth facts surrounding an alleged breach of the Contract of Sale. Appellant
further asserted in the Trial Court that the failure of Gorman or subsequent
purchasers to honor an unrecorded Right of First Refusal excused Appellant from
any further performance under the Contract of Sale or the Restrictive Covenant.
Therefore, to the extent a breach of the Contract of Sale is properly before the
Court, which Appellee contends it is not, Appellee offers the following analysis of
the alleged breach.
The Right of First Refusal in the Contract of Sale was in no way
incorporated into the Warranty Deed conveying the 5 Acres from Appellant to
Gorman. (R.79-81). There is no reference to the Contract of Sale or the Right of
First Refusal whatsoever. (R.79-81). No subsequent purchaser of the property had
notice, constructive or otherwise, that the property was subject to a right of first
refusal. An unrecorded property interest is not binding on a subsequent purchaser
who lacks notice of the interest. See TEX. PROP. CODE ANN. § 13.001.
Furthermore, the foreclosure and subsequent sale of the property by the
lender, which was the first sale of the property after the purchase by Gorman, did
not trigger the right of first refusal under Texas law. (R.62). Involuntary transfers,
19
pursuant to a foreclosure sale, do not trigger a first-refusal right. See Draper v.
Gochman, 400 S.W.2d 545, 548 (Tex. 1966); Consol. Bearing & Supply Co. v.
First Nat’l Bank, 720 S.W.2d 647, 650-51 (Tex. App.—Amarillo, no writ). In
Draper, the right of first refusal gave a sublessee a preferential right to purchase
the leasehold if the “lessor desires to sell or dispose of his interest” in the property.
Draper, 400 S.W.2d at 545. After the lessor defaulted on its mortgage, the
property was sold at foreclosure. Id. The Texas Supreme Court held that the right
of first refusal was not triggered by the foreclosure sale because it was
“involuntary.” Id. at 547. In the case at hand, Appellant obtained the right of first
refusal “[i]n the event that [Gorman] decides to sell the property and/or
business….” (R.68-75). Gorman did not decide to sell the property as required by
the right of first refusal, and the sale was involuntary, which does not trigger the
right under Texas law. The remainder of the transfers or sales leading up to the
purchase by Appellee are not subject to the option either because the option was
only triggered upon Gorman’s decision to sell the property, as set forth in the plain
language of the Contract of Sale.
Appellant was put on constructive notice of the sale by the lender as of the
date the Deed from such sale which was recorded in 1989; therefore, any argument
that the alleged breach irreparably harmed him was rendered null upon the running
of the statute of limitations in 1993. (R.62) Appellant has no recourse with regard
20
to an alleged breach of the Contract of Sale, even if such a breach had any effect
on the Restrictive Covenant at issue, which Appellee contends it does not.
The Right of First Refusal was a personal covenant between Appellant and
Gorman. Any breach of the Right of First Refusal would have been a breach by
Gorman because the right, by its terms, did not run with the land, as it did not bind
successors or assigns, and was only if “Purchaser (Gorman) decides to sell the
property.” (R.68-75). Any suit for breach of the right had to be brought against
Gorman, and had to be brought within four years of the breach. TEX. CIV. PRAC. &
REM. CODE § 16.051. The Right of First Refusal was not referenced in the
Warranty Deed on the 5 Acres at issue, and therefore put no one on notice of the
Right of First Refusal. The first sale of the 5 Acres after the purchase by Gorman,
as shown in Appellant’s Brief, was on December 6, 1988. (R.62). Therefore, the
limitations for a suit on such alleged breach would have run in 1992. If the
limitations began to run upon the sale by the Trustee, the limitations ran as of
1993.
Finally, for the right of first refusal to be binding upon subsequent
purchases, such as Appellee, it must be a covenant running with the land, and
while it does not meet the elements of a covenant running with the land, Appellee
does not brief that issue herein, as it has not been properly raised by Appellant in
this Court or in the Trial Court.
21
SUMMARY
For the reasons set forth herein, the Trial Court correctly entered Final
Judgment in favor of Appellee. Appellee has standing to enforce the Restrictive
Covenant, and Appellant created no issue of material fact regarding the doctrine of
Changed Circumstances.
PRAYER
WHEREFORE, PREMISES CONSIDERED, Appellee respectfully prays
this Honorable Court affirm the Final Judgment of the Trial Court. Appellee
further prays for such other and further relief to which Appellee may be entitled at
law or in equity, including the contingent fees awarded by the Trial Court.
22
Respectfully submitted,
DEAN A. SEARLE
Texas Bar No. 17956600
RONAN S. SEARLE
Texas Bar No. 24079292
SEARLE & SEARLE, PC
P.O. Box 910
305 West Rusk Street
Marshall, Texas 75671
Phone (903) 935-9772
Fax (903) 935-9790
Dsearle54@gmail.com
Ronan.searle@gmail.com
By: /s/ Ronan S. Searle
Ronan S. Searle
Texas Bar No. 24079292
ATTORNEYS FOR THE APPELLEE
.
CERTIFICATE OF COMPLIANCE
Pursuant to Rule 9.4(i)(2) of the Texas Rules of Appellate Procedure, I
hereby certify that this document contains 5,268 words.
/s/ Ronan S. Searle
Ronan S. Searle
23
CERTIFICATE OF SERVICE
I, the undersigned, hereby certify that, on November 4, 2015, I caused to be
served the foregoing pleading upon the counsel listed below via email and also via
the Court’s electronic transmission facilities.
Gerritt M. Pronske
Melanie P. Goolsby
PRONSKE GOOLSBY & KATHMAN, P.C.
15305 Dallas Parkway, Suite 300
Addison, Texas 75001
Email: gpronske@pgkpc.com
Email: mgoolsby@pgkpc.com
/s/ Ronan S. Searle
Ronan S. Searle
24
Appendix "A"