Butler v. Hide-A-Way Lake Club, Inc.

• Court: Texas Court of Appeals
• Writing for the Court: RALEIGH BROWN; ARNOT
• Citation: Butler v. Hide-A-Way Lake Club, Inc., 730 S.W.2d 405 (Tex. App. 1987)
• Decision Date: 30 April 1987
• Docket Number: No. 11-86-143-CV,HIDE-A-WAY,11-86-143-CV
• Petition History: writ ref'd n.r.e.
• Parties: George G. BUTLER et al., Appellants, v.LAKE CLUB, INC. et al., Appellees.

Page 405

730 S.W.2d 405

George G. BUTLER et al., Appellants, v. HIDE-A-WAY LAKE CLUB, INC. et al., Appellees.

No. 11-86-143-CV.

Court of Appeals of Texas Eastland.

April 30, 1987.

Rehearing Denied June 11, 1987.

Charles Crow, Tyler, and L.W. Anderson, Anderson & Miller, Dallas, for appellants.

John H. Minton and Keith Dollahite, Potter, Guinn, Minton & Roberts, Don Cothern and Donald Carroll, Ireland, Carroll & Ireland, Tyler, for appellees.

OPINION

RALEIGH BROWN, Retired Justice, Sitting by Assignment.

This is a summary judgment case. Plaintiffs ¹ sought a declaratory judgment to the effect that two agreements entered into by and between defendants ² violated the by-laws of one of the corporate defendants and the deed restrictions affecting the real properties mentioned in the agreements. Motions for summary judgment were filed by both parties. Defendants' motion was granted, and plaintiffs' motion was denied. Plaintiffs appeal. We affirm.

Plaintiffs are owners of lots in the Hide-A-Way Lake subdivision and, as such, are members of Hide-A-Way Lake Club, Inc. The Club is a nonprofit corporation, formed for the purpose of owning and operating certain areas within the subdivision for the recreation, pleasure, and common use of its members. An elected board of directors manages the affairs of the Club in accordance with its articles of incorporation and by-laws.

In 1977, the Club, through its board of directors, entered a contract with Hide-A-Way Lake Inc., Lake-Hide-A-Way, Inc., the predecessor of Crystal Systems Texas, Inc., and James W. Fair. The contract provided that certain undeveloped lots in the Hide-A-Way Lake subdivision would be conveyed to the Club in exchange for the Club suspending the membership on such lots and assigning the memberships to lots outside the subdivision owned by the grantors. After the execution of this agreement, Hide-A-Way Lake Homeowners, Inc. was formed in order to preserve the tax exempt status of the Club.

In 1984, the Club and Homeowners entered a second agreement with Hide-A-Way Lake, Inc., Lake-Hide-A-Way, Inc., and Fair which transferred the membership rights associated with 34 lots inside the subdivision and authorized such membership to be assigned to lots outside the subdivision. Also, the Club conveyed several pieces of property to the corporations. The corporations agreed to construct an airstrip on land outside the subdivision so that the existing airstrip in the subdivision could be converted to a road.

The 1977 and 1984 transactions are the substance of plaintiffs' cause of action. They urge that the agreements violated the by-laws of the Club and a deed restriction concerning transfer of lots to non-members. They contend that the directors acted in violation of the terms and provisions of the by-laws. Plaintiffs further urge that the agreements provided for a substantial diversion of the corpus of the Club to a person who had made a substantial contribution to the Club and a transfer of a substantial amount of property owned by the Club for less than adequate consideration in violation of the Club's by-laws. They also contend that the deed restrictions which required that developed land should be utilized "so long as feasible" were violated. These contentions urged by plaintiffs in their pleadings are the basis urged in their motion for summary judgment which was denied.

Plaintiffs urge the following points of error:

POINT I

The court erred in refusing to find that the Agreements of May 11, 1977, and October 30, 1984, violated Article III(a) and (b) of the By-laws of Hide-A-Way Lake Club, Inc. in that both Agreements provided for the granting of memberships in Hide-A-Way Lake Club, Inc. to persons who do not own lots in Hide-A-Way Lake or Lake Hide-A-Way Subdivisions.

POINT II

The Trial Court erred in refusing to find that the Board of Directors of Appellee, Hide-A-Way Lake Club, Inc., was bound by the provisions of the By-laws of the Corporation.

POINT III

The Court erred in refusing to find that the Agreements of May 11, 1977, and October 30, 1984, violated the restrictions affecting all of the subdivided lots in the Hide-A-Way Lake and Lake Hide-A-Way Subdivisions, which restrictions require that no sale or other disposition of any lot be consummated unless the purchaser or transferee has been accepted as a member of Hide-A-Way Club.

POINT IV

The Court erred in refusing to find that a genuine issue of a material fact existed as to whether the Agreements of May 11, 1977, and October 30, 1984, provided for a substantial diversion of the corpus of the Club to a person who had made a substantial contribution to the Club or to a corporation controlled by such a person.

POINT V

The Court erred in refusing to find that a genuine issue of a material fact existed as to whether the Agreements of May 11, 1977, and October 30, 1984, provided for the transfer of a substantial amount of property owned by the Club for less than adequate consideration.

POINT VI

The Trial Court erred in refusing to find that the Agreement of October 30, 1984, providing for the conveyance by the Club of the airstrip, the boat landing area, and the 100 ft. X 500 ft. strip of land lying West of the Club's VFD building, violated the restrictions set out in the Deed of August 1, 1969, which required that the developed lands should be utilized, so long as feasible, for the same purposes for which they were originally developed and improved, and which required that the improvements not be completely removed from the Hide-A-Way Lake properties.

POINT VII

The Trial Court erred in considering two Affidavits of Norman H. Vaneck which were filed in support of Appellees' Motion for Summary Judgment in that both Affidavits were based upon "hearsay."

Before considering the merits of plaintiffs' seven points of error, we will first address a threshold issue raised by defendants. Defendants contend that the first six of plaintiffs' seven points of error complain solely of the court's denial of plaintiffs' motion for summary judgment, and fail to address the granting of defendants' motion for summary judgment. The defendants argue that plaintiffs' seventh point of error, which states that certain affidavits in support of defendants' motion were based on hearsay, likewise fails to specifically contest the granting of defendants' motion for summary judgment. Therefore, according to defendants, the plaintiffs' appeal should be dismissed based upon the holdings in Ormsby v. Parker Square Bank, 610 S.W.2d 246 (Tex.Civ.App.--Fort Worth 1980, no writ), and Adams v. Parker Square Bank, 610 S.W.2d 250 (Tex.Civ.App.--Fort Worth 1980, no writ).

In Ormsby, both parties moved for summary judgment with the trial court granting the Bank's motion and denying that of Ormsby. On appeal, Ormsby assigned no error for the granting of the Bank's motion but rather solely appealed the denial of his own motion. The Fort Worth Court of Civil Appeals held that Ormsby could not challenge the denial of his motion for summary judgment:

The next question presented is whether Ormsby has sufficiently complained of the court's granting of the Bank's motion for summary judgment. His point of error does not challenge the granting of the summary judgment as being error. His point of error complains of not granting his motion for summary judgment. It may be that by implication he has reached the point of error that the Bank's motion should not have been granted. Also, in his prayer Ormsby requests that the judgment of the trial court be reversed and rendered for him. The action of the trial court in granting Bank's motion for summary judgment is not discussed anywhere in the argument or brief of Ormsby.

In Ackerman v. Vordenbaum, 403 S.W.2d 362, 365 (Tex.1966) that court held:

The safer rule is one restricting the Tobin-Garcia [Tobin v. Garcia, 159 Tex. 58, 316 S.W.2d 396 (1955) ] doctrine to its factual situation and that disclosed in Gulf, Colorado & Santa Fe Ry. Co. v. McBride, [159 Tex. 442, 322 S.W.2d 492 (1958) ] that is, to cases in which motions for summary judgment have been filed by all of the real parties at interest and the appeal is prosecuted from a judgment granting one or more of them.

We hold that since Ormsby has not challenged by point of error the granting of the summary judgment in favor of the Bank he cannot raise by point of error the denial of his motion for summary judgment.... Appeal dismissed.

Ormsby v. Parker Square Bank, supra at 248-49.

Similarly, in Adams, the Fort Worth Court of Civil Appeals held that the failure of Adams to contest the granting of Bank's motion for summary judgment necessitated the dismissal of Adams' appeal:

It is by reference to [Adams'] brief that we have found absence of any complaint of error by the trial court in having granted summary judgment for his adversary. This fact is evidenced by the point and by the language thereunder to which we have referred to seek to determine whether there was any such complaint of error in the summary judgment which was granted to the defendant bank. Rather than any such complaint we find that appellant Adams has confined himself to point of error and complaint thereunder of no more than the court's failure to grant the motion for summary judgment filed by him.

Could we have known of this at the time the clerk received the transcript in the case it would not have been filed, for an appeal does not lie from an order overruling a motion for summary judgment.

Obviously it is the theory of [Adams] that because both he and his adversary filed motions for summary judgment, followed by order of the court granting the motion of his adversary and denying his own motion, he can predicate his appeal solely upon the denial and disregard the motion granted. That is not the law.

Until there is successful attack made on appeal of the motion granted, with judgment entered in accord, the question does not exist as to whether the trial court...