Moseley v. Arnold

• Decision Date: 18 February 2016
• Docket Number: No. 06–15–00031–CV,06–15–00031–CV
• Citation: 486 S.W.3d 656
• Parties: Douglas B. Moseley, Appellant v. Sherrie Arnold, Appellee
• Court: Texas Court of Appeals

486 S.W.3d 656

Douglas B. Moseley, Appellant

v.Sherrie Arnold, Appellee

No. 06–15–00031–CV

Court of Appeals of Texas, Texarkana.

Submitted: December 3, 2015

Decided: February 18, 2016

Rehearing Overruled March 22, 2016

Gerrit M. Pronske, Melanie Goolsby, Pronske Goolsby & Kathman, PC, Addison, TX, for appellant

Dean A. Searle, Ronan S. Searle, Searle & Searle, PC, Marshall, TX, for appellee

Before Morriss, C.J., Burgess and Carter,^* JJ.

OPINION

Opinion by Chief Justice Morriss

For at least the last twenty-four years, the five-acre tract at the southeast corner of Interstate Highway 20 and Texas Highway 43 in Harrison County, on which was once located a business known as Moseley's Truck Stop, has been unimproved property. But, back in 1985, when the five-acre tract and its personal property had been sold as a package by Douglas B. Moseley for a price of almost $1 million, it had hosted the truck stop. As part of the sale,¹ the five acres was benefitted by a restrictive covenant on the 6.379 acres located at the northeast corner of the same intersection and owned by Moseley (the Retained Tract). That covenant provided that the Retained Tract “may not be developed and used as a truck stop and fuel stop.” Now, three decades after the sale, a dispute² has arisen between Moseley and the current owner of the five acres, Sherrie Arnold,³ concerning the restrictive covenant's enforceability against the Retained Tract.⁴

The trial court granted Arnold summary judgment that the restrictive covenant was enforceable against the Retained Tract. Moseley's appeal argues that Arnold lacked standing to enforce the covenant and that fact issues on the presence of changed conditions make Arnold's summary judgment improper.⁵ We reverse the summary judgment and remand this matter to the trial court because, while (1) Arnold has standing to enforce the restrictive covenant, (2) fact issues regarding changed conditions preclude summary judgment.

(1) Arnold Has Standing to Enforce the Restrictive Covenant

Moseley contends that Arnold lacks standing to enforce the restrictive covenant. He does not dispute in this Court that the restrictive covenant is a covenant that runs with the land.⁶ However, Moseley argues that, under the terms of the restrictive covenant agreement, Arnold is not one of the intended beneficiaries of the restrictive covenant. As we understand his argument, Moseley reasons that the transaction with the Gormans gave them two separate and distinct rights as expressed in the two separate documents delivered to them at closing. The warranty deed gave them their ownership rights in the five-acre tract, and the restrictive covenant agreement gave them the right to restrict the use of the Retained Tract. Moseley emphasizes that the warranty deed did not reference the restrictive covenant and points to the language in the operative clause of the restrictive covenant agreement stating that the restrictive covenant is “for the benefit of Robert T. Gorman, and wife, Nancy S. Gorman, and their successors and assigns.” This, he argues, shows the clear intent of the parties to limit the right of enforcement of the restrictive covenant to the Gormans and their successors and assigns of the restrictive covenant agreement. In other words, Moseley contends that only those persons who received a specific, written assignment of the restrictive covenant agreement from the Gormans have standing to enforce the restrictive covenant.⁷ Since there is no evidence of an assignment of the restrictive covenant agreement, and since none of the deeds in Arnold's chain of title reference the restrictive covenant, Moseley reasons that there is no privity of estate that would entitle Arnold to enforce the restrictive covenant. Arnold responds that the operative clause goes on to state that the Retained Tract “may not be developed and used as a truck stop and fuel stop to protect the value and desirability of” the five-acre tract. She argues that the intent of the parties was that the intended beneficiaries of the restrictive covenant are the five-acre tract and any person owning an interest in the five-acre tract. Therefore, she argues, since she owns the five-acre tract, she is an intended beneficiary and has standing to enforce the restrictive covenant.

Standing is a constitutional prerequisite to maintaining suit. See Tex. Ass'n of Bus. v. Tex. Air Control Bd., 852 S.W.2d 440, 444 (Tex.1993). The lack of standing deprives a court of subject-matter jurisdiction to hear a case. Austin Nursing Ctr., Inc. v. Lovato, 171 S.W.3d 845, 849 (Tex.2005). A party generally has standing to bring suit where a controversy exists between the parties that “ ‘will be actually determined by the judicial declaration sought.’ ” Tex. Ass'n of Bus., 852 S.W.2d at 446 (quoting Bd. of Water Eng'rs v. City of San Antonio, 155 Tex. 111, 283 S.W.2d 722, 724 (1955) ).

In re Estate of Hardesty, 449 S.W.3d 895, 903 (Tex.App.–Texarkana 2014, no pet.). In suits over restrictive covenants, “a person has standing to enforce the restriction only on showing that the restriction was intended to inure to his or her benefit.” Country Comm. Timberlake Village, L.P. v. HMW Spec. Util. Dist ., 438 S.W.3d 661, 667 (Tex.App.–Houston [1st Dist.] 2014, pet. denied) (citing Calvary Temple v. Taylor, 288 S.W.2d 868, 870 (Tex.Civ.App.–Galveston 1956, no writ) ).

Generally, a restrictive covenant may be enforced only by the parties to the restrictive covenant agreement and those parties in privity with them. Wasson Interests, Ltd. v. Adams, 405 S.W.3d 971, 973 (Tex.App.–Tyler 2013, no pet.) (citing Ski Masters of Tex., LLC v. Heinemeyer, 269 S.W.3d 662, 668 (Tex.App.–San Antonio 2008, no pet.) ). “Privity of estate exists when there is a mutual or successive relationship to the same rights of property.” MPH Prod. Co., 2012 WL 1813467, at *2 (citing Wayne Harwell Props., 945 S.W.2d at 218 ; Panhandle & S.F.R. v. Wiggins, 161 S.W.2d 501, 504–05 (Tex.Civ.App.–Amarillo 1942, writ ref'd w.o.m.) ). Further, “any person entitled to benefit under the terms of a restrictive covenant may enforce it.” Girsh v. St. John, 218 S.W.3d 921, 923 (Tex.App.–Beaumont 2007, no pet.) (citing Anderson v. New Prop. Owners' Ass'n of Newport, Inc., 122 S.W.3d 378, 384 (Tex.App.–Texarkana 2003, pet. denied) ; Taylor, 288 S.W.2d at 872–73 ). The summary judgment evidence establishes that Arnold is the successor of the Gormans' interest in the five acres. The resolution of this issue, then, requires us to construe the intent of the parties, as expressed in the restrictive covenant agreement, to determine whether Arnold, as the successor of the Gormans' interest in the five-acre tract, is an intended beneficiary who is entitled to benefit under the terms of the restrictive covenant agreement.

We construe restrictive covenants using the general rules of contract construction. See Pilarcik v. Emmons, 966 S.W.2d 474, 478 (Tex.1998). “Whether restrictive covenants are ambiguous is a question of law. Courts must examine the covenants as a whole in light of the circumstances present when the parties entered the agreement.” Id. (citing Grain Dealers Mut. Ins. Co. v. McKee, 943 S.W.2d 455, 458 (Tex.1997) ; Columbia Gas Transmission Corp. v. New Ulm Gas, Ltd., 940 S.W.2d 587, 589 (Tex.1996) ). Restrictive covenants “are ‘unambiguous as a matter of law if [they] can be given a definite or certain legal meaning.’ ” Id. (quoting Grain Dealers, 943 S.W.2d at 458 ). If we find there is no ambiguity, we “must determine the intent from the language used in the document.” Silver Spur Addition Homeowners v. Clarksville Seniors Apartments, 848 S.W.2d 772, 774 (Tex.App.–Texarkana 1993, writ denied). Our primary purpose “is to ascertain and give effect to the true intention of the parties as expressed in the instruments.” Ski Masters of Tex. LLC v. Heinemeyer, 269 S.W.3d 662, 667 (Tex.App.–San Antonio 2008, no pet.) (citing Owens v. Ousey, 241 S.W.3d 124, 129 (Tex.App.–Austin 2007, pet. denied) ). However, if a restrictive covenant is “susceptible to more than one reasonable interpretation, [it is] ambiguous.” Pilarcik, 966 S.W.2d at 478. If the restrictive covenant is susceptible to two or more reasonable interpretations, then it “creates a fact issue as to the parties' intent.” TX Far W., Ltd. v. Tex. Invs. Mgmt., Inc., 127 S.W.3d 295, 302 (Tex.App.–Austin 2004, no pet.) (citing Columbia Gas Transmission Corp., 940 S.W.2d at 589 ). “In construing the intent, a court is not to concern itself with the merits of restrictions because the parties to the restrictions had a right to adopt any type of restrictions they chose.” Id.

The operative clause of the restrictive covenant agreement contains three clauses relevant to determining the parties' intent regarding its intended beneficiaries. First, it states that the purpose of the restrictive covenant is to benefit the Gormans, their successors and assigns. Second, it provides that the restrictive covenant is given “to protect the value and desirability of” the five-acre tract being purchased by the Gormans. Finally, the operative clause expresses the parties' intent that the restrictive covenant run with the land and binds all parties owning any interest in the Retained Tract. Moseley's construction requires us to consider the first clause only and renders the remaining clauses meaningless. However, when an agreement is unambiguous,⁸ “the instrument alone will be deemed to express the intention of the parties, for objective intent controls, not subjective intent. Generally the parties to an instrument intend every clause to have some effect and in some measure to evidence their agreement.” City of Pinehurst v. Spooner Addition Water Co., 432 S.W.2d 515, 518 (Tex.1968) (citations omitted). Therefore, we examine the agreement in its entirety and consider every clause. When the clauses are read together, it is clear that the restrictive covenant is meant to benefit the five-acre tract the Gormans were...