Robert A. Rakowski and Clear Creek Civic Association, Inc. v. Committee to Proctect Clear Creek Village Homeowners' Rights and Preserve Our Park

Appellants= Motion for Rehearing Overruled; Affirmed; Plurality and Concurring and Dissenting Opinions of December 20, 2007 Withdrawn, and Substitute Plurality and Concurring and Dissenting Opinions filed April 3, 2008

Appellants= Motion for Rehearing Overruled; Affirmed; Plurality and Concurring and Dissenting Opinions of December 20, 2007 Withdrawn, and Substitute Plurality and Concurring and Dissenting Opinions filed April 3, 2008.

In The

Fourteenth Court of Appeals

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NO. 14-05-01143-CV

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ROBERT A. RAKOWSKI, Appellant, and CLEAR

CREEK CIVIC ASSOCIATION, INC., Appellants/Cross-Appellee

V.

COMMITTEE TO PROTECT CLEAR CREEK VILLAGE HOMEOWNERS= RIGHTS AND PRESERVE OUR PARK, Appellee/Cross Appellant

On Appeal from the 405th District Court

Galveston County, Texas

Trial Court Cause No. 04CV1407A

S U B S T I T U T E   P L U R A L I T Y   O P I N I O N

Appellants= motion for rehearing is overruled, the Plurality Opinion issued in this case on December 20, 2007 is withdrawn, and the following Substitute Plurality Opinion is issued in its place.

In this subdivision property dispute, the parties each appeal a summary judgment entered for the other on the grounds that the trial court erred in ruling that: (1) the Clear Creek Village Subdivision=s (the ASubdivision@) restrictive covenants attached to the Claiborne Park property (the APark@) and (2) the Clear Creek Village Civic Association (the AAssociation@) was the record title holder to the Park.  We affirm.

Background

In 2004, the Committee to Protect Clear Creek Village Homeowners= Rights and Preserve Our Park (the ACommittee@) filed suit to prevent the Association from selling the Park to Robert Rakowski, who intended to use it for commercial purposes.  The parties filed cross motions for summary judgment, and the trial court granted separate summary judgments declaring, respectively, that: (1) the Association is the lawful record title holder of the Park and thereby has the right to convey it; but (2) the Subdivision=s Restrictions, Covenants, and Conditions (the Arestrictions@) apply to the Park, prohibit its use for any commercial purpose, and require the Association to maintain it solely for recreational use.

Standard of Review

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.  Sudan v. Sudan, 199 S.W.3d 291, 292 (Tex. 2006).  Where, as here, both sides move for summary judgment and the trial court grants one motion and denies the other, we review both sides= summary judgment evidence, determine all questions presented, and render the judgment the trial court should have rendered.  Valence Operating Co. v. Dorsett, 164 S.W.3d 656, 661 (Tex. 2005).

We review a trial court=s interpretation of a restrictive covenant de novo.  Buckner v. Lakes of Somerset Homeowners Ass=n, Inc., 133 S.W.3d 294, 297 (Tex. App.CFort Worth 2004, pet. denied). Restrictive covenants are subject to the general rules of contract construction.  Pilarcik v. Emmons, 966 S.W.2d 474, 478 (Tex. 1998). Therefore, in construing a restrictive covenant, our primary task is to determine the drafter=s intent and to liberally construe the language of the restrictions to give effect to their purposes and intent and to harmonize all of the provisions so that none are rendered meaningless.^[1]

Application of Restrictions

The Association and Rakowski (Aappellants@) challenge the summary judgment, holding that the restrictions apply to the Park, on the grounds that: (1) the Park is not included within the platted boundaries of the Subdivision; (2) the restrictions are not specifically set forth in the deed that purports to convey the Park from Bill Williams to the Association=s predecessor; (3) the restrictions= enabling language states that they apply only to Subdivision lots; and (4) the restrictions allow subsequent owners to take without the restrictions.

The restrictions include a provision titled ARecreational Area@ that references a ARecreation Area@ labeled on the recorded plat for Section 1 of the Subdivision.  The parties do not dispute that this ARecreational Area@ in the restrictions, and this ARecreation Area@ on the plat, each refer to the Park.  The restrictions reserve this area for the use and enjoyment of those owning or occupying residential lots in all current and future sections of Clear Creek Village, of which at least six were added in the ensuing years, with the deed of trust and restrictions, covenants, and conditions for each referencing the Park as a recreational area and requiring dues be spent for its maintenance.

In support of their contention that the Park is not included in the Subdivision boundaries, appellants rely on Sills v. Excel Servs., Inc., 617 S.W.2d 280, 284 (Tex. Civ. App.CTyler 1981, no writ).  There, homeowners in a subdivision sought to enjoin the construction of an apartment complex by enforcing a restrictive covenant that allowed lots to be used only for single family residences.  Id. at 281B82.  The court held that the restrictive covenants did not apply to the tract in question because: (1) the tract was not within the dark line delineating the subdivision=s outer boundaries; (2) inclusion of the tract in the subdivision would have required flood plain data to be submitted, which was not done; and (3) the restrictions referred only to the subdivision lots and failed to show any scheme or plan of development imposing the restrictions on property not encompassed within the subdivision=s boundaries.  Id. at 283B84.

In contrast to Sills, and applying part of its rationale,  the restrictions in this case demonstrate Aa scheme or plan of development imposing restrictions on property not encompassed within the subdivision=s boundaries.@  Id. (noting the property at issue was not only Aclearly outside@ the subdivided tract, but Athe record completely negates the existence of any scheme or plan of development@).   The appurtenant property is arguably outside the dark line that demarcates the lots of the subdivision, but the restrictions specifically reference it, and a review of the recorded map of the subdivision clearly marks that section as Recreation Area, putting any person on notice that it is part of a plan or scheme of development.  Any would-be purchaser could only determine the nature of this designation by reading the subdivision=s restrictions.

While appellant contends that there is no indication of these restrictions on the map of Braskora Gardens, the record reveals only a map of an area too large to show the necessary level of detail, and does not show any of the subdivisions into which Braskora Gardens was subsequently parsed, including Clear Creek Village.  The record contains no other map of sufficient detail showing the Recreation Area as anything but that, and that would fail to put a would-be purchaser on notice that he must look to the restrictions.  See Anderson v. McRae, 495 S.W.2d 351, 359 (Tex. App.CTexarkana 1973, no writ.) (noting that an easements or other appurtenant right is conveyed when shown or referred to on a plat, and that Aall of the appurtenances ascertainable by the map@ are conveyed). The fact that the Park was not described in detail by metes and bounds is immaterial.  Id. (delineating some of the areas in contest as Aarea reserved for recreation and roadway@); see also Spencer v. Levy, 173 S.W. 550, 557 (Tex. App.CAustin 1914, writ ref=d).^[2]

In this case, our record contains a general plan of development expressly imposing the restrictions on the Park.^[3] Therefore, even if the Park is outside the platted boundaries of the Subdivision, that alone does not preclude the application of the restrictions, and appellants= first contention is overruled.

Appellants= second contention, that the restrictions are not recited in the deed, fails to note that a property may become subject to the restrictions and covenants of a general plan of development under a number of scenarios, including: (1) by grant; (2) by an express reference to the restrictions and covenants in the conveyance documents, which are duly recorded;^[4] and/or (3) when the parties otherwise have constructive knowledge of the restrictions through the recorded property records.^[5]  As such, even if the Association and Rakowski are correct about the deed, an attack on the deed is insufficient to find that the restrictions and covenants are inapplicable to the Park.  Therefore, appellants= second contention is overruled.

Regarding appellants= third contention, the restrictions= enabling language specifies that the uniform plan of development shall govern Athe use, development, improvement and sale of lots@ and Adoes hereby place and impose the following restrictions, covenants, and conditions upon and against the lots.@  The Association argues that this language limits the application of the restrictions only to actual subdivision lots.  However, this fails to read the restrictions as a whole and fails to give meaning to every provision, particularly those expressly referring to the Park.^[6]  Therefore, appellant=s third contention is overruled.

Contrary to appellants= fourth contention, the restrictions allow future owners of the Park to take it free and clear of the restrictions only if the property is sold at a foreclosure sale in the event of default on a loan used to improve or beautify the Park for the benefit and enjoyment of the persons entitled to use it.  Therefore, this clause is not evidence that the restrictions do not apply, as appellants argue, but merely a mechanism to enable the Subdivision to obtain debt to improve the Park by allowing such debt to be secured by a lien.  Because appellants= issue does not demonstrate that the trial court erred by granting summary judgment that the restrictions apply to the Park, it is overruled.^[7]

                                                                     Ownership

The Committee challenges the trial court=s ruling, that the Association was the lawful title holder to the Park, because its purported transferor, Bill Williams, possessed no conveyable interest in the Park property, having conveyed it earlier to Bill Williams Construction Company.^[8] The Association responds that the Committee does not have standing to challenge the ownership of the Park property because the Committee has no claim to ownership in the Park.^[9]

In a subdivision unified by deed restrictions, the individual property owners have standing to challenge a planned action of the neighborhood association by virtue of their ownership of property in that neighborhood.^[10]  Similarly, the deed restrictions in this case allow Aany person owning or having an interest in any residential lot in the Clear Creek Village Section I to institute and prosecute any proceeding at law or in equity to abate, prevent, or enjoin any such violation.@

However, the Committee can be aggrieved, and thereby have standing to contest matters, concerning the Park only if the Association owns the Park on behalf of the Subdivision in which the Committee members are property owners.^[11] If the Committee is correct that there is a defect in the Association=s title to the Park, such that the Association does not own it, then the Committee thereby has no standing to contest any issues concerning ownership of the Park.  Because the Committee=s challenge cannot be sustained unless the Committee lacks standing to assert it, we are without jurisdiction to consider it.^[12]  Therefore, the Committee=s challenge to the summary judgment that the Association is the rightful owner

of the Park is overruled, and the judgment of the trial court  is affirmed.

/s/        Richard H. Edelman

Senior Justice

Judgment rendered and Substitute Plurality and Concurring and Dissenting Opinions filed April 3, 2008. (Fowler, J., concurring without an opinion) ( Frost, J., concurring and dissenting).

Panel consists of Justices Fowler, Frost, and Edelman.^*

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^[1]           See Wilmoth v. Wilcox, 734 S.W.2d 656, 658 (Tex.1987); Village of Pheasant Run Homeowner Ass=n, Inc. v. Kastor, 47 S.W.3d 747, 750 (Tex. App.CHouston [14th Dist.] 2001, pet. denied); see also Tex Prop. Code Ann. ' 202.003(a) (Vernon Supp. 2007); Luckel v. White, 819 S.W.2d 459, 462 (Tex. 1991). 

^[2]           In Anderson, the property also had a detailed recital of the designation of the property for the subdivision and the use of the lot owners.  Anderson, 495 S.W.2d at 359.  While this detailed designation is not reflected on the map of Clear Creek Village in the present case, a buyer is nonetheless put on notice by the map to look at the restrictions which do contain a detailed designation.

^[3]           Restrictions may also apply to the Park where parties who purchased homes in the subdivision were induced to make such a purchase by reference to the plat upon which the appurtenant right is shown or referred to. See Forister v. Coleman, 418 S.W.2d 550, 559-60 (Tex. App.CAustin 1967, writ ref=d n.r.e.).

^[4]           See Cooksey v. Snider, 682 S.W.2d 252, 253 (Tex. 1984) (noting that purchasers are charged with knowledge of the contents of recorded instruments and the terms of deeds in their chain of title); Westland Oil Dev. Corp. v. Gulf Oil Corp., 637 S.W.2d 903, 908 (Tex. 1982) (noting that a purchaser is bound by every recital, reference, and reservation contained in, or fairly disclosed by, any instrument which forms an essential link in the chain of title under which he claims).

^[5]           See Evans v. Pollock, 796 S.W.2d 465, 466 (Tex. 1990); Inwood North Homeowners= Ass=n, Inc. v. Harris, 736 S.W.2d 632, 635 (Tex. 1987) (noting that a purchaser with constructive notice of restrictive covenants becomes bound by them); Burns v. Woods, 492 S.W.2d 940 (Tex. 1973);  see generally Lehmann v. Wallace, 510 S.W.2d 675, 680 (Tex. Civ. App.BSan Antonio 1974, writ ref=d n.r.e.) (noting that a general plan may Abe established in various ways, such as by express covenant, by implication from a filed map, or by parol representations . . . or the grantor pursuing a course of conduct indicating a neighborhood scheme . . . @); see also Collum v. Neuhoff, 507 S.W.2d 920, 927 (Tex. Civ. App.BDallas 1974, no writ) (on motion for rehearing: indicating that the reservation of areas for parks or common areas, along with assessments for their maintenance, tends to prove intent for a general plan of development).

^[6]           See Anderson, 495 S.W.2d at 359 (Tex. Civ. App.CTexarkana , 1973) (holding that when evidence on the recorded plat indicates intent, a referenced recreational area becomes incorporated by reference and lot purchasers can rely on that dedication); see generally Raman Chandler Props., L.C. v. Caldwell=s Creek Homeowners Ass=n, Inc., 178 S.W.3d 384, 394 (Tex. App.CFort Worth 2005, pet. denied) (discussing the reservation of common areas to be maintained for the benefit of the homeowners); Selected Lands Corp v. Speich, 702 S.W.2d 197, 200 (Tex. App.BHouston [1^st Dist.] 1985, writ ref=d n.r.e.) (discussing how common areas are often evidence of a general plan of development); see also McCart v. Cain, 416 S.W.2d 463, 465B66 (Tex. App.CFort Worth 1967, writ ref=d n.r.e.) (discussing the right of homeowners to enforce restrictions on these common areas); Evans, 796 S.W.2d at 466.

^[7]           However, this is not to say that the restrictions could not be modified in accordance with applicable procedures to remove this requirement.  See Tex. Prop. Code Ann.'' 210.004B.008 (Vernon Supp. 2007).

^[8]           Although the Committee pleaded other grounds for challenging the sale of the Park, this is its only contention on appeal regarding the ownership issue.  Therefore, the other grounds are not before us for any purpose and do not bear on whether jurisdiction exists to decide the sole ground asserted in this appeal.

^[9]           Standing is a component of subject matter jurisdiction and cannot be waived.  McAllen Med. Ctr. v. Cortez, 66 S.W.3d 227, 238 (Tex. 2001).  Without past or present ownership interest in title to land, a party does not have standing to challenge the transfer of the title pertaining to said land.  See Marburger v. Seminole Pipeline Co., 957 S.W.2d 82, 89B90 (Tex. App.CHouston [14th Dist.] 1997, pet. denied) (deciding husband who had no ownership interest in wife=s real property did not have standing to contest validity of easement over land); Hollar v. Jowers, 310 S.W.2d 721, 724 (Tex. Civ. App.CEastland 1958, writ ref=d n.r.e.) (deciding party who had no ownership interest in land was not entitled to bring suit to cancel deeds).

^[10]          Subsets of homeowners are valid parties to declaratory judgments made for or against homeowner=s associations.  See e.g., Brooks v. Northglen Ass=n, 141 S.W.3d 158, 162B63 (Tex. 2004) (noting that in a declaratory judgment, individual homeowners, though not indispensable, are valid parties); Wilchester W. Concerned Homeowners LDEF, Inc. v. Wilchester W. Fund, Inc., 177 S.W.3d 552, 558B561 (Tex. App.BHouston [1^st Dist.] 2005, pet. denied) (discussing the right of a sub-group of homeowners to challenge a homeowner=s association action).  In this case, the Committee members, though a subset of the total community, are all owners in Clear Creek Village.  Such an organization may have standing if: (1) its members have standing to sue on their own behalf, (2) the interests the organization seek to protect are germane to the organization=s purpose, and (3) neither the claim nor the relief requested requires the participation of individual members in the lawsuit.  Tex. Ass=n. of Bus. v. Tex. Air Control Bd., 852 S.W.2d 440, 447B48 (Tex. 1993).

^[11]          The dissenting opinion correctly recognizes that if the Association had title and ability to transfer the Park to Rakowski, then the members of the Committee would be personally aggrieved and have standing to contest the transfer.  However, because the Committee=s sole contention on appeal is that the Association does not have such title, the Committee is necessarily also thereby contending that it is not aggrieved so as to have standing.  Similarly, the dissenting opinion would reverse the summary judgment on grounds not asserted by the Committee on appeal and thus unassigned error.

^[12]          The dissenting opinion contends that a determination of standing can not be based on a party=s position on the merits.  While it is correct that a party can not be required to prove their entire case  to establish jurisdiction, a party=s position on the merits is frequently what distinguishes between the party=s standing and a lack of standing.  See, e.g., S. Tex. Water Auth. v. Lomas, 223 S.W.3d 304, 307B08 (Tex. 2007) (holding that taxpayer lacked standing to assert that the contract was misapplied, but would have had standing to allege that the contract was illegal); City of Houston v. Williams, 216 S.W.3d 827, 828B29 (Tex. 2007) (holding that retired firefighters lacked standing to seek a statutory interpretation on behalf of firefighters still employed, but would have had such standing if they had asserted a right to payments from the City in the future); Allstate Indem. Co. v. Forth, 204 S.W.3d 795, 795B96 (Tex. 2006) (holding that insured lacked standing to sue her insurer for settling her medical bills in an allegedly arbitrary and unreasonable manner, but would have had standing if insured had asserted that she had unreimbursed, out-of-pocket medical expenses); Bland Ind. Sch. Dist. v. Blue, 34 S.W.3d 547, 554B58 (Tex. 2000) (noting that a party=s allegation of amount in controversy is jurisdictional, and holding that a taxpayer who has no distinct injury from the general public has standing to sue a governmental entity to enjoin an illegal expenditure of public funds, but lacks standing to enjoin the entity from paying for goods and services it has already received and placed into permanent use).

^*           Senior Justice Richard H. Edelman sitting by assignment.