Fox v. O'Leary

• Decision Date: 10 July 2012
• Docket Number: NO. 03-11-00270-CV,03-11-00270-CV
• Parties: Jeffrey A. Fox, Appellant v. James F. O'Leary, Jr., Appellee
• Court: Texas Court of Appeals

Jeffrey A. Fox, Appellant v. James F. O'Leary, Jr., Appellee

NO. 03-11-00270-CV

TEXAS COURT OF APPEALS, THIRD DISTRICT, AT AUSTIN

Filed: July 10, 2012

ON MOTION FOR REHEARING

FROM THE DISTRICT COURT OF TRAVIS COUNTY, 126TH JUDICIAL DISTRICT

NO. D-1-GN-10-002394, HONORABLE AMY CLARK MEACHUM, JUDGE PRESIDING

MEMORANDUM OPINION

The opinion and judgment issued in this cause on March 14, 2012, are withdrawn, and the following opinion is issued in lieu of the earlier one.

Jeffrey A. Fox appeals a take-nothing judgment rendered against him in his suit for injunctive relief arising out of his claim that James F. O'Leary, Jr.'s construction of a home on his lot violated deed restrictions governing their subdivision. After a bench trial, the trial court concluded that Fox's claims were barred by the affirmative defense of laches. We will reverse the trial court's judgment and remand the cause for further proceedings.

FACTUAL AND PROCEDURAL BACKGROUND

Fox and O'Leary own adjoining lots in the Highland Hills subdivision in Austin. O'Leary purchased his lot in 1977, and Fox purchased his lot in early 2007. At the time of both purchases, the lots had houses on them that were built during the original development of the subdivision in the 1960s. All the lots in the subdivision, including those owned by Fox and O'Leary, are subject to deed restrictions recorded in the Travis County Deed Records. The deed restrictions have been in place since 1963 and provide, in pertinent part:

8. Set-Back: Front Line, Side Line, and Rear Line

No structure shall be located or erected on any plot nearer to the front plot line than 40 feet; or nearer than 10 feet to any side line; or nearer than 25 feet to a side street line; or nearer than 20 feet to any rear line; provided, that the [S]ubdividers, or in the alternate, the Architectural Committee referred to in Paragraph 10 may vary set-back requirements to City minimum where in the opinion of the Subdividers or the Committee no adverse effect will be had on the neighborhood and where, because of trees and/or topography, the strict enforcement of the provisions of this paragraph would militate against the best utilization of the lot. Under no circumstances, however, shall a structure approach nearer than 25 feet to the front line; or nearer than 7 1/2 feet to any side line; or nearer than 10 feet to any rear line, or if a corner, nearer than 15 feet to a side street line.

In October 2007 O'Leary's house was destroyed by fire. In 2009 O'Leary decided to rebuild on the lot and hired an architect to prepare plans and specifications for the new construction. Construction began in January 2010. By mid-February the slab for the foundation (apparently slightly larger than the old slab) was poured, and by early March framing of the exterior walls was under way.

On March 4 Holly Eaton, O'Leary's next-door neighbor on the south side of his property, notified O'Leary that his new house was in violation of the setback provisions of the deedrestrictions. Specifically, she informed him that the house was nearer than 10 feet to the boundary between their lots. At that time she showed O'Leary a copy of the deed restrictions. The next day, O'Leary reviewed the Travis County real property records and confirmed the existence of the deed restrictions Eaton had showed him. O'Leary testified that he "went down there to check to find out whether or not there were any other additional documents that were relevant to the documents or the copy of the deed restrictions [Eaton] had provided" and "to find out if there was anything in addition to those deed restrictions that would impact the validity of the original document." O'Leary further testified:

But still and all, I realized that the deed restrictions—regardless of what [Eaton] did to soften the blow, so to speak, the deed restrictions were what they were. And I realized shortly thereafter—I probably measured the north property line and realized that I was in violation at that point also. And all through this process, I'm thinking how can I live here in this property, in this subdivision for 30 years, and be totally oblivious of any deed restrictions? And I—I felt as though I was absolutely in an incredulous [sic] position to be in. I started thinking about, at that time, the amount of money, which was in the neighborhood of well over $200,000 that I had—that we had drawn already on the construction draw, and the amount of work that we had done on the house, the framing had been complete, and I took all of those things into account and decided to go ahead and continue with the—with the project.

In mid-May Eaton had a conversation with Fox, who was O'Leary's neighbor to the north, during which she pointed out the fact that O'Leary's new house was being built in violation of the setback provisions in the deed restrictions. Fox reviewed the deed restrictions and confirmed that Eaton was correct. Fox then attempted to contact O'Leary. Not having a telephone number for O'Leary, Fox finally located him by driving through the neighborhood looking for O'Leary's car, which was parked in front of the home O'Leary was living in while his new house was underconstruction. Fox testified that on June 10, he and O'Leary discussed the new construction and that he asked O'Leary how he was able to circumvent the deed restrictions. According to Fox, O'Leary stated that he did not think the deed restrictions were enforceable. On June 14 Fox notified O'Leary in writing that he objected to the new construction because it violated the deed restrictions and advised O'Leary to consult with his architect regarding how to remedy the violations. O'Leary testified that he did not stop construction on the house because

I felt in my heart of hearts that given the amount of work that had been done on the house, given what it would take to now redesign the house, I thought I was just in an impossible situation, and I wasn't about [sic] halting construction at that point, allowing the project to lay [sic] dormant while we tried to work through this process. I felt as though, at least until I had received this letter and then maybe a little beyond it, that there was a chance that we might be able to—specifically myself and Mr. Fox might be able to work something out to accommodate his concerns.

In July 2010 Fox sued O'Leary for breach of restrictive covenants, alleging that O'Leary's construction of the home violated deed restrictions governing their subdivision. Fox sought a permanent injunction that would require O'Leary to bring his home into compliance with the deed restrictions. O'Leary filed a general denial and, as affirmative defenses, asserted that Fox's claims were barred by limitations, waiver, laches, and unclean hands. In a counterclaim, O'Leary alleged that Fox's house also failed to comply with the deed restrictions and sought to enjoin Fox from allowing his house to remain on his property in violation thereof. O'Leary also sought a declaration that Fox's right to enforce the deed restrictions was barred by limitations and had been waived by (1) the presence of other non-conforming residences in the subdivision, and (2) Fox's conduct in waiting an unreasonable length of time to assert his claim. O'Leary requested that thetrial court declare any non-compliance to be de minimis, balance the equities between the parties, and allow the house to remain in place. After a four-day bench trial, the court rendered judgment in O'Leary's favor on the ground that he had established that Fox's claims were barred by the affirmative defense of laches. The trial court expressly denied O'Leary's other affirmative defenses and also rendered judgment that O'Leary take nothing by way of his counterclaim. Fox perfected this appeal.

STANDARD OF REVIEW

In an appeal from a judgment rendered after a bench trial, the trial court's findings of fact have the same weight as a jury's verdict, and we review the legal and factual sufficiency of the evidence to support them as we would review a jury's findings. See Catalina v. Blasdel, 881 S.W.2d 295, 297 (Tex. 1994). When the trial court's express findings of fact do not address all grounds for recovery or defenses, an appellate court implies findings of fact regarding the omitted grounds or defenses that are needed to support the judgment. Pulley v. Milberger, 198 S.W.3d 418, 427 (Tex. App.—Dallas 2006, pet. denied). To determine whether legally sufficient evidence supports a challenged finding, we must credit evidence favorable to the finding if a reasonable factfinder could, disregard contrary evidence unless a reasonable factfinder could not, and reverse the factfinder's determination only if the evidence presented in the trial court would not enable a reasonable and fair-minded factfinder to reach the judgment under review. City of Keller v. Wilson, 168 S.W.3d 802, 827 (Tex. 2005). We will sustain a legal-sufficiency challenge if the record reveals: (1) the complete absence of evidence of a vital fact; (2) that the court is barred by rules of law or evidence from giving weight to the only evidence offered to prove a vital fact; (3) that theevidence offered to prove a vital fact is no more than a mere scintilla; or (4) that the evidence conclusively establishes the opposite of a vital fact. Id. at 810.

In reviewing a factual-sufficiency challenge, we examine the entire record and consider and weigh all the evidence, both in support of and contrary to the challenged finding. Ortiz v. Jones, 917 S.W.2d 770, 772 (Tex. 1996). When a party attacks the factual sufficiency of an adverse finding on an issue on which it has the burden of proof, it must demonstrate on appeal that the adverse finding is against the great weight and preponderance of the evidence. Urista v. Bed, Bath & Beyond, Inc., 245 S.W.3d 591, 601 (Tex. App.—Houston [1st Dist.] 2007, no pet.). When a party attacks the factual sufficiency of an adverse finding on which it does not have the burden of proof, we...