Hodas v. Scenic Oak Property Association

• Decision Date: 26 April 2000
• Docket Number: No. 04-98-00287-CV,04-98-00287-CV
• Citation: Hodas v. Scenic Oak Property Association, 21 S.W.3d 524 (Tex. App. 2000)
• Parties: (Tex.App.-San Antonio 2000) Arthur HODAS and Wife, Cynthia Hodas, Appellants, v. SCENIC OAKS PROPERTY ASSOCIATION, Appellee
• Court: Texas Court of Appeals

Page 524

21 S.W.3d 524 (Tex.App.-San Antonio 2000)

Arthur HODAS and Wife, Cynthia Hodas, Appellants, v.SCENIC OAKS PROPERTY ASSOCIATION, Appellee

No. 04-98-00287-CV

Court of Appeals, Fourth District of Texas

April 26, 2000

Rehearing Overruled May 30, 2000

From the 37th Judicial District Court, Bexar County, Texas Trial CourtNo. 95-CI-10566Honorable Solomon Casseb, Jr., Judge Presiding

Sitting: Alma L. Lopez, Justice Paul W. Green, Justice Sarah B. Duncan, Justice

Opinion

Opinion by: Paul W. Green, Justice

Art and Cynthia Hodas(collectively "the Hodases") appeal from the trial court's grant of summary judgment in favor of the appellee, Scenic Oaks Property Association("the Association") on the Association's claim for unpaid property assessments.The trial court held all assessments levied against the Hodases were valid and the Association conclusively proved each and every element of its claim.Judgment in the amount of $35,269.42, including attorney's fees, plus interest at ten percent per annum, was entered against the Hodases.In one issue on appeal, the Hodases assert the Association failed to prove its claim because the assessments levied against them were invalid as a matter of law.We affirm the trial court's judgment.

Statement of Facts

The original deed restrictions and covenants for the Scenic Oaks subdivision were established by the developer, RET Enterprises, Inc., on June 4, 1979.All restrictions were duly recorded with the county clerk's office in Bexar County, Texas.These restrictions were later amended on May 11, 1981, and the amended restrictions were filed with the county clerk.By virtue of their property ownership in Scenic Oaks, Art and Cynthia Hodas are subject to all restrictions and covenants of the subdivision, as provided in their warranty deed dated March 14, 1983.In fact, all property owners in Scenic Oaks subdivision are governed by the restrictive covenants referenced in their warranty deeds.

The record shows Art Hodas served as a member and treasurer of the Association board of directors from October 1984 to May 1988.On April 10, 1987, a special meeting was held to discuss assessments for a twenty-four hour security guard and a new secured entrance gate.Notice of the meeting was provided through a proxy voting form dispensed to subdivision property owners, which stated in part, "Notice is given that a meeting of members of the Scenic Oaks Property Owners' Association is scheduled for April 10, 1987 at a time and place to be announced, for the purpose of considering special assessments."¹According to their proxy form, the Hodases voted to waive the holding of an actual meeting, and voted for a security gate and twenty-four hour security guard to be assessed as a one-time fifty dollar fee and a monthly fee of twenty-five dollars a month.

Minutes of the meeting indicate Art Hodas was present and gave a summary of the proxy votes and survey results.In that meeting, the "special assessment," as it was termed in the meeting minutes, was approved and a twenty-five dollar monthly charge for a twenty-four hour security guard and a one-time one hundred dollar assessment for a secured entrance gate² was levied.According to the summary judgment evidence, the Hodases made payments on the security assessments through May of 1989.The security assessment for the guard continues to be an ongoing assessment levied against the appellants.

In May of 1988, Art Hodas resigned as a member of the Association board of directors.On August 6, 1990, another special membership meeting was held in which a proposed road and drainage assessment was approved.The members voted to approve a one- time assessment that would finance a multi-year capital improvement project.A payment plan was adopted, consisting of a one-time fifty dollar payment and then a ten dollar monthly payment beginning on October 1, 1990, and continuing through February 28, 1996.Neither Hodas nor his wife participated in the passage and approval of the road and drainage assessment.However, this assessment was levied on the Hodases from October 1, 1990, through February 1, 1996.The last payment made to the Association by the Hodases was in May of 1989 for two hundred dollars.

Scope and Standard of Review

On review, we consider whether the summary judgment proof established as a matter of law that there is no genuine issue of material fact as to one or more of the essential elements of plaintiff's cause of action.Gibbs v. General Motors Corp., 450 S.W.2d 827, 828(Tex.1970).On appeal, the movant has the burden to show that no genuine issue of material fact existed and that he is entitled to judgment as a matter of law.American Tobacco Co. v Grinnell, 951 S.W.2d 420, 425(Tex.1997)(citingNixon v. Mr. Property Management Co., 690 S.W.2d 546, 548-49(Tex.1985)).We indulge every reasonable inference and resolve any doubts in favor of the non-movant.Id.Where a disputed fact issue does exist, evidence favoring the non-movant will be taken as true.Id.The scope of our review is based on the grounds asserted by the movant in its motion for summary judgment.SeeTex. R. Civ. P. 166a(c).

Discussion and Analysis

The Dispute

It is undisputed that property assessments for the Scenic Oaks subdivision are regulated by the terms of the original Restrictive Covenants incorporated into the property deeds by the developer, and the Amendments to Restrictions for Scenic Oaks Subdivision Unit II filed in the county records in 1981.The Hodases say both the monthly security guard assessment and the road and drainage assessment were special assessments governed by Section H of the restricted covenants.Section H governs special assessments and reads as follows:

Section H. Special Assessments for Capital Improvements.In addition to the annual assessment authorized above, the Association may levy, in any assessment year, a special assessment applicable to that year only for the purpose of defraying, in whole or in part, the cost of any construction, reconstruction, repair or replacement of a capital improvement upon the Common Area, including fixtures and personal property related thereto, provided that any such assessment shall have the assent of two-thirds (2/3rds) of the votes of each class of members who are voting in person or by proxy at a meeting duly called for this purpose.

The Hodases claim the security guard assessment is invalid because it was not intended to be, and was not, used for a capital improvement, the only type of project authorized by Section H. The Hodases contend the road and drainage assessment is invalid because it was to be paid over a period exceeding one year and special assessments for capital improvements under Section H must be collected in the year in which they are assessed.If the security guard assessment and road and drainage assessment are invalid under the deed restrictions, the Association's deficiency judgment cannot be affirmed.In the alternative, the Hodases argue a question of fact exists whether or not these assessments were in fact special assessments to be governed by Section H.

The Association counters that the security guard assessment was an annual assessment subject to the restrictions of Section G, not a special assessment which triggered the application of Section H. Section G outlines the maximum annual assessments which can be assessed by the board of directors and states:

Until January 1 of the year immediately following the conveyance of the first Lot to an Owner, the maximum annual assessment shall be Sixty and No/100 Dollars ($60.00) per Lot.

(i) From and after January 1 of the year immediately following the conveyance of the first Lot to an Owner, the maximum annual assessment may be increased each year not more than ten percent (10%) above the maximum assessment for the previous year without a vote of the membership.

(ii)From and after January 1 of the year immediately following the conveyance of the first Lot to an Owner, the maximum annual assessment may be increased above ten percent (10%) by a vote of two-thirds (2/3rds) of each class of members who are voting in person or by proxy, at a meeting duly called for this purpose.

(iii)The Board of Directors may fix the annual assessment at an amount not in excess of the maximum.

The Association further maintains that the road and drainage assessment meets all the requirements of Section H.According to the Association, Section H merely mandates that total liability be imposed in the year in which a special assessment's total amount is determined.The Association contends that section H does not require complete collection of a special assessment in the year it is imposed.

Interpretation of Restrictive Covenants

"Restrictive covenants are subject to the general rules of contract construction."Pilarcik v. Emmons, 966 S.W.2d 474, 478(Tex.1998).The question of whether a restrictive covenant is ambiguous is a question of law for the court.Pilarcik, 966 S.W.2d at 478;Fisk Elec. v. Constructors & Associates, 888 S.W.2d 813, 814(Tex.1994).On review, this court must attempt to determine the objective intent of the covenant and whether that intent was violated.Munson v. Milton, 948 S.W.2d 813, 816(Tex. App. San Antonio1997, writ denied);see alsoWilmoth v. Wilcox, 734 S.W.2d 656, 658(Tex.1987)(construing meaning of restrictive covenant entails determination of intent of framers).We liberally construe the covenant to give effect to its purpose and intent.Tex. Prop. Code Ann. § 202.003(a)(Vernon 1995);Pilarcik, 966 S.W.2d at 478(stating the entire document must be given effect or provisions are rendered meaningless);Grain Dealers Mut. Ins. Co. v. McKee, 943 S.W.2d 455, 458(Tex.1997)(holding contracts should be examined as a whole in light of circumstances present when parties entered into agreement).

Mere disagreement over the interpretation of a provision does not make it...