Teal Trading & Dev., LP v. Champee Springs Ranches Prop. Owners Ass'n

• Decision Date: 31 January 2020
• Docket Number: No. 17-0736,17-0736
• Citation: 593 S.W.3d 324
• Parties: TEAL TRADING AND DEVELOPMENT, LP, Petitioner, v. CHAMPEE SPRINGS RANCHES PROPERTY OWNERS ASSOCIATION, Respondent
• Court: Texas Supreme Court

593 S.W.3d 324

TEAL TRADING AND DEVELOPMENT, LP, Petitioner,

v.CHAMPEE SPRINGS RANCHES PROPERTY OWNERS ASSOCIATION, Respondent

No. 17-0736

Supreme Court of Texas.

Argued September 26, 2019

OPINION DELIVERED: January 31, 2020

Robert Earl Henneke, Texas Public Policy, Foundation, 901 Congress Avenue, Austin TX 78701, for Amicus Curiae Kerr County, Texas.

Manuel (Ned) Munoz, Jr., Texas Association of Builders, V.P. of Reg. Affairs & Gen. Counsel, 313 East 12th Street, Suite 210, Austin TX 78701, for Amicus Curiae National Association of Home Builders and the Texas Association of Builders.

Aaron Daniel Day, Texas Land Title Association, 1717 West 6th Street, Suite 120, Austin TX 78703, for Amicus Curiae Texas Land Title Association.

Evan A. Young, Ellen E. Springer, Thomas R. Phillips, Baker Botts L.L.P., Austin, Charles Dixon Mosty, Richard C. Mosty, Mosty Law Firm, Kerrville, Kimberly S. Keller-Stolarczyk, Keller Stolarczyk, PLLC, Boerne, for Teal Trading and Development, LP.

Scott A. Brister, Hunton Andrews Kurth LLP, Austin TX, Randall B. Richards, Law Offices of Randall B. Richards, Boerne, for Champee Springs Ranches Property Owners Association.

JUSTICE BLAND delivered the opinion of the Court.

In this suit between adjoining landowners, we determine whether a neighborhood association may enforce a restrictive easement against neighboring property. The disputed easement encircles nearly 10,000 acres of land in Kendall and Kerr counties, largely restricting access to a main entrance. The original tract was subdivided after the easement was created. Today, part of the acreage is occupied by the Champee Springs Ranches neighborhood, represented here by its property owners association.

The petitioner, Teal Trading and Development, LP, owns two parcels of undeveloped property. One of Teal's parcels borders Champee Springs, sits within the original tract, and is burdened by the restrictive easement. Teal's other parcel lies next to the first, outside the restrictive easement. Teal seeks to avoid the easement, to connect both properties to existing public roads in Champee Springs, and to develop the parcels into a residential subdivision. To further these plans, Teal's predecessor built a private construction road across the easement, in violation of the easement's access restriction. Champee Springs sued to enforce the easement.

The trial court enforced the easement, ruling that the easement burdens Teal's property. The court rejected Teal's waiver and estoppel affirmative defenses, and Teal's further challenge that restrictive easements that limit private access are void against public policy. The court of appeals affirmed. Before this Court, Teal raises a standing challenge and reurges its waiver, estoppel, and public-policy arguments.

We hold that Champee Springs has standing to sue to enforce the easement. We further hold that the evidence supports the trial court's rejection of Teal's affirmative defenses. Finally, we decline Teal's invitation to void restrictive access easements on public-policy grounds. In our view, the permissibility of such easements, at least under these facts, is an issue best left to the legislature and local governments. Accordingly, we affirm the judgment of the court of appeals.

I

A

In June 1998, E.J. Cop purchased 9,246 acres in Kendall and Kerr counties. Cop platted the land as a residential development and called it Champee Springs Ranches. In conjunction with the plat, Cop signed and recorded a "Declaration of Covenants, Conditions, and Restrictions," for the purpose of protecting the "value," "attractiveness," and "desirability" of the property. Among the restrictions is the disputed easement, which largely restricts private access to a main entrance:

There is hereby reserved unto Declarant a one (1) foot easement for precluding and prohibiting access to the PROPERTY or Ranger Creek Road or Turkey Knob Road by adjoining property owners other than Declarant and Declarant's express assigns. This easement is inside of and contiguous to the perimeters of the PROPERTY as described in exhibit "A" hereto, provided that no easement is reserved over, across or upon any public road right-of-way which is dedicated by and shown on that certain Plat of Champee Springs Ranches ... and further provided Tract 4 of said Champee Springs Ranches subdivision shall be entitled to one access entrance across the restrictive covenant along the southwestern boundary line of said Tract 4, but none other access without Declarant's express written consent thereto.

The parties agree that the easement prevents the landowners burdened by it from permitting private access through the easement along the boundary of the original perimeter of Cop's tract.¹

In July 1998, Cop sold 1,328 acres in Champee Springs to a buyer, who resold 660 of those acres in the northwest corner. The new buyers platted the acreage as Privilege Creek Ranches. Teal now owns this parcel.

In July 1999, the Champee Springs landowners replatted their acreage, subdividing their existing interior lots. The replat was filed in Kendall County. Teal's property—located entirely in Kerr County—was not part of the replat and is not shown on the plat maps. The replat lists new "boundary and interior lot line calls" for the property, and utility easements that "affect this property." But it does not list the disputed restrictive easement, and the interior boundary notes state: "RESERVE STRIPS / NON ACCESS EASEMENTS ARE NOT ALLOWED UNLESS THEY ARE DEDICATED TO THE COUNTY."²

Eventually, Teal's predecessor-in-title, BTEX Ranch, LP, purchased the Privilege Creek acreage and an adjoining 1,173 acres immediately to the north. The Privilege Creek acreage—part of Cop's original tract—is burdened by the restrictive easement. The adjoining acreage to the north—not part of Cop's original tract—is outside the restrictive easement. The restrictive easement thus bisects Teal's contiguous parcels.

In 2006, BTEX attempted to develop both tracts as one residential subdivision. To that end, BTEX built a private construction road, in violation of the restrictive easement, connecting Turkey Knob Road, located within the Privilege Creek tract and Champee Springs, to Lane Valley Road, which runs roughly north-south through both of Teal's tracts. If the construction road became a permanent private road, the implication for Champee Springs residents was that their one-way-in-one-way-out neighborhood would become a private throughway for new residential developments to the northwest.

B

Seeking to enforce the easement, the Champee Springs Ranches Property Owners Association intervened in a lawsuit filed against BTEX by Kendall County. The trial court severed Champee Springs' claims into a separate lawsuit. Meanwhile, Teal acquired BTEX's land through foreclosure and intervened in the lawsuit.

In the trial court, the parties moved for summary judgment. Champee Springs contended that the court should enforce the easement because Teal purchased the property subject to the easement. The easement is recorded in Teal's deed, and it appears in the chain of title from its inception. Teal, on the other hand, responded that the easement is void against public policy because it is an improper restraint on the use and alienation of real property and contrary to Kerr County subdivision regulations. Relying on the 1999 replat and its notation that restrictive easements are "not allowed," Teal also raised the affirmative defenses that Champee Springs waived or is estopped from enforcing the easement against Teal.

The trial court granted summary judgment in favor of Champee Springs, and Teal appealed. In the first appeal, the court of appeals reversed, holding that fact issues existed as to Teal's affirmative defenses; we denied review.³ On remand, the trial court declared that the easement was an enforceable covenant and not an unreasonable restraint against alienation or use. The court held a bench trial on Teal's affirmative defenses: waiver, estopped-by-deed, estoppel-by-record, and quasi-estoppel.

Based on the evidence presented, the trial court rejected Teal's affirmative defenses. Given the recognition of the easement in all of the parties' deeds before and after the 1999 replat, the trial court found that the replat did not support Teal's waiver and estoppel arguments. The court signed a judgment declaring the easement valid, binding, and enforceable against Teal as a covenant running with the land.

Teal appealed again. The court of appeals this time affirmed the trial court's judgment.⁴ The court applied the rule that "when parties attempt to alter or revoke a restrictive covenant, such alteration or revocation is ineffective in the absence of agreement of all owners whose properties are affected by the restrictive covenant."⁵ Because not all owners affected by the easement signed the replat, the court held that those who signed it could not effectively disclaim the easement.⁶ The court thus rejected Teal's arguments on waiver, estoppel-by-deed, and estoppel-by-record.⁷ The court of appeals further expressed its reservations that Teal could invoke estoppel-by-deed and estoppel-by-record because Teal's property was not part of the 1999 replat. The court observed that "it has long been the law in Texas that recorded documents are not competent evidence of such recitals as between a party to the document and a stranger thereto."⁸

The court of appeals separately considered Teal's quasi-estoppel argument because, unlike estoppel-by-deed and estoppel-by-record, the doctrine is not foreclosed by Teal's status as a stranger to the 1999 replat.⁹ Even so, the court of appeals held that the evidence did not establish that those who signed the 1999 replat disclaimed the right to enforce the pre-existing easement.¹⁰ Finally, the court of appeals rejected Teal's argument that the easement is void against public policy.¹¹

C

In its petition to this Court, Teal newly contends that Champee Springs lacks standing to sue...