Aghili v Banks

• Decision Date: 21 November 2001
• Docket Number: No. 14-98-01148-CV,14-98-01148-CV
• Citation: 63 S.W.3d 812
• Parties: <!--63 S.W.3d 812 (Tex.App.-Houston 2001) BAHRAM AGHILI AND MITRA RAFII, Appellants v. JOHN R. BANKS, JR., TANGLEWILDE SOUTH SECTION OWNERS ASSOCIATION, INC., ASSOCIATION MANAGEMENT CORPORATION, AND ELBAR INVESTMENTS, INC., Appellees Court of Appeals of Texas, Houston (14th Dist.)
• Court: Texas Court of Appeals

Page 812

63 S.W.3d 812 (Tex.App.-Houston [14th Dist.] 2001)

BAHRAM AGHILI AND MITRA RAFII, Appellants v JOHN R. BANKS, JR., TANGLEWILDE SOUTH SECTION OWNERS ASSOCIATION, INC., ASSOCIATION MANAGEMENT CORPORATION, AND ELBAR INVESTMENTS, INC., Appellees

No. 14-98-01148-CV

Court of Appeals of Texas, Houston (14th Dist.).

November 21, 2001.

Rehearing Overruled Jan. 3, 2002

On Appeal from the 269th District Court Harris County, Texas Trial Court Cause No. 98-01613

[Copyrighted Material Omitted] Panel consists of Justices Sears, Draughn, and Andell.^*

OPINION ON REHEARING

Ross A. Sears, Justice

Appellants, Bahram Aghili and Mitra Rafii, file a motion for rehearing, noting that we inadvertently failed to address in our original opinion their appeal of the denial of their cross-motion for summary judgment. Accordingly, we withdraw our previous opinion of August 23, 2001, and substitute this opinion in its place.

This is an appeal from a lawsuit filed by appellants to set aside the non-judicial foreclosure of their homes by their condominium owners' association. On cross-motions for summary judgment, the trial court granted summary judgment against appellants and denied their own motion for partial summary judgment. In five issues, appellants contend that the trial court erred (1) in affirming non-judicial foreclosure without prior recordation of the owners' association's liens; (2) in refusing to rule that a prerequisite to a non-judicial foreclosure was a filing of a notice of lien; (3) in affirming foreclosure sales not shown to have been conducted by a duly authorized attorney-in-fact or trustee approved by resolution of the owners' association's board of directors; (4) in admitting portions of the summary judgment evidence; and (5) in dismissing their claims against John Banks, Jr. and the management company.

We affirm the denial of appellants' motion for partial summary judgment because the owners' association was not required to record a notice of lien before it conducted a non-judicial foreclosure of appellants' condominiums. However, because we hold that the trial court erred in admitting an affidavit in support of appellees' motion for summary judgment, and because there is a fact issue without the affidavit, we reverse and remand the summary judgment granted to appellees for further proceedings. Finally, because appellees' motion for summary judgment did not address the individual claims against John Banks, Jr. and Association Management Corporation, it was error to award summary judgment on them, and these claims are also remanded.

BACKGROUND¹

Bahram Aghili and his sister, Mitra Rafii, owned three condominiums in Tanglewilde South, Section II. Part of the obligations of ownership was payment of monthly maintenance fees to the Tanglewilde South, Section II, Owners' Association (the owners' association). Aghili was responsible for these payments for his condominium and as agent for his sister's two units. However, in 1997, he was suffering because of a kidney transplant and related treatment and fell behind on his payments beginning in August. In November, the purported trustee for the owners' association, John R. Banks, Jr., sent Aghili a letter for each condominium to collect the debt. In December, Banks allegedly mailed notices of sale to Aghili by certified mail. However, the letters were returned. Nonetheless, John Banks proceeded with the sale of the homes on January 6, 1998. He sold the homes to Elbar Investments, Inc. ("the buyer"), with whose principal he was on a first-name basis and to whom he sold five such properties in January alone. Although the market value of the condominiums appeared to be $29,000, $29,000, and $39,000, the buyer paid only $2,000, $2,000, and $4,000 respectively. The unpaid owners' maintenance fees on the properties totaled $5,604.96.

Aghili learned about the sale via his tenants, who had been instructed by the buyer to stop paying rent to him. On January 9, 1998, just three days after the sale, Aghili's attorney contacted Banks, but Banks denied any irregularities in the sale. After Aghili filed suit on January 15 against the owners' association, Banks, the buyer, and Association Management Corporation ("the management company"), Banks filed an answer that stated he was the attorney for all defendants. He also filed a motion to dismiss, again listing himself as attorney for all defendants. He shortly thereafter filed a motion for summary judgment, which he clearly drafted for all defendants and signed on behalf of the owner's association, the management company, and himself and with permission of the buyer. Three days before the summary judgment hearing, the buyer made its first independent appearance in the case with its own attorney when it filed its original answer. Banks filed a second affidavit, averring he had inadvertently listed the buyer as one of his clients in the previous pleadings.

The motion for summary judgment essentially stated that the foreclosure sale had occurred in accordance with the law. The central proof for the motion was provided by Banks in the form of his own affidavit. In it, he identified various documents, claimed to be the duly-appointed trustee for the owner's association, asserted that he had sent formal written demands and timely notice of sale to Aghili, and explained the details of the sale. Appellants lodged numerous objections to the affidavit, including that it should be struck from evidence because Banks was disqualified from appearing as both witness and advocate for the parties in the proceeding.

Additionally, appellants filed a motion for partial summary judgment, seeking a ruling that the condominium declaration required the owners' association to file a notice of lien before it conducted a non-judicial foreclosure.

RECORDATION OF LIEN

In their first and second points of error, appellants claim that the trial court erred in denying summary judgment to them and in granting summary judgment against them because the condominium declaration required the owners' association to file a notice of lien before proceeding with non-judicial foreclosure. Because we hold that the condominium declaration did not require further recordation of a notice of lien, we overrule points or error one and two.

A condominium owner's obligation to pay levied assessments is secured by a continuing lien on the condominium unit. Tex. Prop. Code Ann. § 82.113(a) (Vernon 1995) (Uniform Condominium Act). The owners' association creates this lien by recordation of the condominium declaration. Id. § 82.113(c). Such recordation constitutes both record notice and perfection of the lien. Id. No further recordation is necessary unless so specified by the condominium declaration. Id. In this case, appellants contend the condominium declaration specifically requires further recordation of a notice of lien before non-judicial foreclosure.

Thus, the issue we must address is the interpretation of the condominium declaration for Tanglewilde South, Section II. Restrictions in such an instrument are treated as contracts between the parties. See Herbert v. Pollo Ranch Homeowners Ass'n, 943 S.W.2d 906, 907-08 (Tex. App. Houston [1st Dist.] 1996, no writ). They are subject to the same general rules of contract interpretation. Pilarcik v. Emmons, 966 S.W.2d 474, 478 (Tex. 1998). "In construing a written contract, the primary concern of the court is to ascertain the true intentions of the parties as expressed in the instrument." Coker v. Coker, 650 S.W.2d 391, 393 (Tex. 1983). To achieve this objective, courts consider the entire writing in an effort to give effect to all the provisions of the contract so that none will be rendered meaningless. Id.

If a declaration's restrictive covenants can be given a definite or certain legal meaning, the covenants are unambiguous. Pilarcik, 966 S.W.2d at 478. If there is no ambiguity in the restrictive covenants, the court must decide their intent from the language used in the document, Silver Spur Addition Homeowners v. Clarkesville Seniors Apt., 848 S.W.2d 772, 774 (Tex. App. Texarkana 1993, writ denied). Whether restrictive covenants are ambiguous is a matter of law for the courts to decide. Roman Catholic Diocese of Galveston-Houston v. First Colony Cmty. Serv. Assoc., Inc., 881 S.W.2d 161, 163 (Tex. App. Houston [1st Dist.] 1994, writ denied).

All parties agree the following language in article 24 of the condominium declaration is unambiguous:

To evidence such a lien the Board of Managers or Managing Agent may, but shall not be required to, prepare a written notice setting forth the amount of such indebtedness, the name of the owner of the condominium unit and a description of the condominium unit. Such a notice shall be signed by one of the Board of Managers or by the Managing Agent and may be recorded in the Office of the Clerk Recorder of Harris County, Texas. Such lien . . . shall attach from the date of failure of payment of the assessment. Such lien may be enforced by foreclosure of the defaulting owner's condominium unit by the Association in like manner as a mortgage on real property upon the recording of notice of claim thereof. In any such foreclosure, the owner shall be required to pay the costs and expenses of such proceedings, the cost and expenses for filing the notice or claim of lien and all reasonable attorney's fees.

. . . .

Each owner, upon acceptance of a deed to a condominium unit, hereby expressly vests in the Association or its agents the right and power to bring all actions against such owner personally for the collection of such charges as a debt, and to enforce the foresaid lien by all methods available for the enforcement of such liens, including non-judicial foreclosures pursuant to Article 3810 of the Texas Revised Civil Statutes, and such owner hereby expressly grants to the Association a power of sale in connection with said lien.

Appellants focus on the one italicized phrase in...