Sassen v. Tanglegrove Townhouse Condominium Ass'n
| Decision Date | 31 May 1994 |
| Docket Number | No. 06-93-00089-CV,06-93-00089-CV |
| Citation | 877 S.W.2d 489 |
| Parties | Barbara SASSEN, Appellant, v. The TANGLEGROVE TOWNHOUSE CONDOMINIUM ASSOCIATION and KRJ Management, Inc., Appellees. |
| Court | Texas Court of Appeals |
Sharon L. Michaels, Houston, for appellant.
Michael W. Cooper, Lueders & Boanerges, Rick S. Butler, Butler, Ewalt & Hailey, Houston, for appellees.
Before CORNELIUS, C.J., and BLEIL and GRANT, JJ.
Barbara Sassen appeals from the trial court's judgment notwithstanding the verdict in her suit against the Tanglegrove Townhouse Condominium Association and KRJ Management, Inc.
On December 22, 1989, a fire damaged Sassen's condominium. The condominium was located in the Tanglegrove Townhouses in Houston, Texas, and was owned and operated by the Tanglegrove Condominium Association and KRJ Management, Inc. ("the Association"). Sassen was in Florida when the fire occurred, but she returned home on December 23. She testified that a fire restoration company, Blackman Mooring, was on the scene. She went back to Florida the same day, returning to Houston on December 27. On entering her condominium, which had apparently been boarded up by Blackman Mooring, she discovered that the water pipes had frozen and the condominium had flooded. She testified that she and a friend located the water main and turned the water off. She then made arrangements to live elsewhere in Houston while repairs were made.
On January 16, 1990, the Association and its management company, KRJ Management, Inc., employed Texas General Contractors to repair the damaged units. During the weeks following, Sassen became unhappy with the manner and quality of the contractor's work. Among her complaints: some of her personal belongings had been removed from her condominium by the contractor, who left them exposed in her driveway; she wanted the smoke-blackened rafters in her attic replaced, rather than scraped and painted as the contractor intended to do; she had difficulty in getting the contractor to communicate with her; she was unhappy that the contractor was installing a "generic" air conditioner compressor instead of one similar to the brand she had had before the fire; and the condominium was not being restored to the same condition as before the fire.
In the early part of March, Sassen met with Colin Oakley of the Association, Rick Butler, the Association's attorney, and Mike Hickey of Texas General Contractors. She expressed her complaints and asked that the work be stopped and that she be allowed to employ another contractor. She said that Oakley told her that the Association had a contract with Texas General Contractors and the work would continue. After the meeting Sassen purchased a no trespassing sign and a padlock, both of which she put on her front door, denying the contractor further access to the condominium.
Sassen filed suit against the Association for breach of fiduciary duty and for wrongfully refusing to allow her to repair the condominium. She pleaded that the Association and the condominium owners are governed by a Condominium Declaration and attached a copy of the declaration to her petition. The Association answered with a general denial and filed a counterclaim for declaratory relief under the Uniform Declaratory Judgments Act, TEX.CIV.PRAC. & REM.CODE ANN. §§ 37.001, et seq. (Vernon 1986 & Supp.1994), arguing that the Condominium Declaration grants it the exclusive right to repair and reconstruct the property. The Association also subsequently specifically pleaded the Condominium Declaration as governing the rights and duties of the parties and alleged that Sassen was contributorily negligent, had failed to deal in good faith, and did not have standing as a consumer under the Deceptive Trade Practices Act. 1 Sassen added the DTPA claim and claims of breach of contract, fraud, negligence, breach of implied covenant, duty of good faith and fair dealing, and various affirmative defenses to the counterclaim, including waiver, estoppel, failure of consideration, laches, ambiguity, and subsequent oral modification of the Declaration.
The jury's verdict was generally in favor of Sassen. It found that the Association was sixty percent negligent and Sassen was forty percent negligent in causing delay in the condominium's repair; that the Association's conduct relating to the repair was arbitrary, capricious, or discriminatory; that the Association failed to comply with the provisions of the declaration of the Condominium Association; that the Association's failure to comply with the declaration was not excused by Sassen's failure to comply; that Sassen was damaged in the sum of $35,000.00 for costs of repair and $3,000.00 for time and expense; and that reasonable attorney's fees for Sassen were $16,500.00 and $8,000.00 for the Association.
The trial court disregarded the jury's answers finding that the Association failed to comply with the Condominium Declaration, that the failure was not excused, and that the cost to repair the condominium was $35,000.00. It also rendered declaratory judgment declaring that the Association has the exclusive authority to engage, contract with, direct, and control a contractor to complete the necessary repairs and restoration work resulting from the fire and ordering the Association to restore Sassen's property to substantially the same condition that existed before the fire. The trial court did not disregard the jury's finding that the Association acted arbitrarily, capriciously, or discriminatorily. In fact, it expressly provided in the judgment that such finding, among others, was incorporated in the judgment and made a part of it. The judgment further stated:
The Court has and does disregard the jury's responses to questions 6, 7 and 10(1). The Court in all other respects accepts the verdict and enters it as the verdict of the jury.
(Emphasis added.) Nevertheless, the court denied Sassen any recovery under the jury's verdict.
Sassen contends, among other things, that the trial court erred in granting judgment notwithstanding the jury's verdict. We agree and will reverse and render judgment for Sassen on the jury's verdict.
The trial court correctly declared that the Association had the exclusive authority to contract for and conduct the repairs to the condominium. The Association's declaration expressly so provides. In Section 28, it states:
28. This Declaration hereby makes mandatory the irrevocable appointment of an attorney-in-fact to deal with the property upon its destruction or obsolescence.
... All of the owners irrevocably constitute and appoint the TANGLEGROVE TOWNHOUSE CONDOMINIUM ASSOCIATION, a non-profit association, or its successor non-profit corporation, if same be hereafter organized, their true and lawful attorney in their name, place, and stead, for the purpose of dealing with the property upon its destruction or obsolescence as is hereafter provided. As attorney-in-fact, the Association, by its president and secretary, shall have full and complete authorization, right and power to make, execute and deliver any contract, deed or any other instrument with respect to the interest of a condominium unit owner which are necessary and appropriate to exercise the powers herein granted. Repair and reconstruction of the improvement(s) as used in the succeeding subparagraphs means restoring the improvement(s) to substantially the same conditions in which it existed prior to the damage, with each unit and the general and limited common elements having the same vertical and horizontal boundaries as before.
The declaration also provided that the Association would be entitled to the insurance proceeds to use for repair and restoration. Sassen, however, alleged that, as her agent for such repairs, the Association violated the terms of its own agency and acted arbitrarily, capriciously, and discriminatorily, i.e., it breached its fiduciary duty.
The appointment of an attorney-in-fact creates an agency relationship. An agency creates a fiduciary relationship as a matter of law. Crim Truck & Tractor Co. v. Navistar Int'l Transp. Corp., 823 S.W.2d 591 (Tex.1992); Locke v. Thigpen, 353 S.W.2d 249 (Tex.Civ.App.--Houston 1961), rev'd on other grounds, 363 S.W.2d 247 (Tex.1963); Kinzbach Tool Co. v. Corbett-Wallace Corp., 138 Tex. 565, 160 S.W.2d 509 (1942); RESTATEMENT (SECOND) OF AGENCY Ch. 13 (1958); 3 TEX.JUR.3 D Agency § 113 (1980). A fiduciary owes its principal a high duty of good faith, fair dealing, honest performance, and strict accountability. Kinzbach Tool Co. v. Corbett-Wallace Corp., supra;...
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