Scott v. Williams
| Decision Date | 26 August 1980 |
| Docket Number | No. 8742,8742 |
| Citation | 607 S.W.2d 267 |
| Parties | William J. SCOTT et al., Appellants, v. Mary R. WILLIAMS et al., Appellees. |
| Court | Texas Court of Appeals |
Thomas K. Boone, Wayne A. Johnson, II, Dalton, Moore, Forde, Joiner & Stollenwerck, Dallas, for appellants.
C. Thomas Wesner, Jr., Wesner, Wylie & Pleasant, Dallas, for appellees.
Plaintiffs, Mary R. Williams, Doris Wiese, Linda Austin, Jean Sheerin, Andrea Lee Shuey, and Jennifer Lucas, are owners of apartments in Belle Meadow, a condominium regime established pursuant to the Texas Condominium Act, Tex.Rev.Civ.Stat.Ann. art. 1301a. They brought this suit against William Scott, Austin Embree, Rita Devine, Jack Devine, Annette Lacy and Maurine Thompson, alleging that the defendants, who also own apartments in Belle Meadow and additionally serve as members of the regime's board of administration, had controlled the affairs of the regime for their own personal gain and had mismanaged its affairs and misapplied its funds. The suit sought damages, as well as an injunction against future acts of mismanagement or misapplication of funds.
Belle Meadow's by-laws adopted pursuant to Article 1301a provide that each owner of an apartment in the condominium regime becomes a member of the council of co-owners and has a vote in the same proportion as his or her ownership bears to the total units in the regime. The board of administration is composed of the president, vice president and secretary-treasurer, who are elected by the council of co-owners, and is given the authority to manage the regime.
Belle Meadow, was converted from an apartment complex into a condominium regime in early 1974. There were 39 purchasers of apartments. Most of the purchasers were absentee landlords who purchased several individual units for use as rental property. Only four of the purchasers in 1974 were owner-occupants. The defendants in this case are investor owners who, because of the large number of apartments they own, were able to dominate the council of co-owners and secure control of the board of administration. Plaintiffs' petition complained that the defendants had taken advantage of their positions on the board to run the regime for their own personal benefit and had used Belle Meadow funds to benefit their private leasing operations. The other owners in Belle Meadow were not joined in the suit, either as defendants or plaintiffs, but the plaintiffs alleged in their petition that they were bringing the suit for themselves individually and as "equitable representatives of the co-owners of Belle Meadow." The defendants objected, by special exceptions and various other pleadings, to the absence of the other owners, but the point was overruled by the trial court and the cause went to trial before a jury. Based upon jury findings, the trial court entered judgment which:
(1) awarded each of the plaintiffs her proportionate part of total damages which the jury found had been suffered by the condominium regime by reason of the defendants' wrongful acts and omissions (2) awarded the plaintiffs, as equitable representatives of Belle Meadow, judgment for several specific amounts of money, and provided that those sums would be placed in interest bearing accounts to be expended by the board of administration for the repair and maintenance of the commonly owned areas of the condominium regime;
(3) awarded each plaintiff her proportionate part of a total sum found by the jury as exemplary damages arising from the defendants' willful and malicious acts;
(4) enjoined the defendants from committing any of a long list of improper and illegal acts regarding administration of the regime;
(5) mandatorily enjoined the defendants to require certain acts deemed necessary for the proper and lawful administration of the condominium regime in accordance with the Texas Condominium Act, and for the preservation of the rights of the owners thereof; and,
(6) awarded attorney's fees of $11,000.00 directly to plaintiffs' attorneys.
Defendants have assigned 49 points of error. They first contend that the plaintiffs lacked standing to maintain the action for damages on behalf of the absent owners. We agree.
A condominium regime results in two distinct real property interests being vested in each owner of an apartment in the regime. He owns his individual unit or apartment in fee simple, and he also owns an undivided interest, together with all the other unit owners, in the common elements. Thus, the owner has two distinct estates-one in severalty and the other in common.
It should go without saying that unless authorized by statute, rule or contract, one owner of real estate in severalty cannot sue for the owner of another totally separate parcel of real estate, whether the suit be for title or for damages. 44 Tex.Jur.2d Parties § 8, p. 150. There was no allegation or proof here that the plaintiffs were contractually authorized to sue for the absent owners, and there are only two methods prescribed by statue or rule in our state which might have authorized them to represent those owners, either as to the common elements or the separate interests. One is the condominium act itself. It provides in § 16 that:
"Without limiting the rights of any apartment owner, action may be brought by the administrator or other person designated by the by-laws or council of co-owners, in either case in the discretion of the council of co-owners, on behalf of two (2) or more of the apartment owners, as their respective interests may appear, with respect to any cause of action relating to the common elements of more than one (1) apartment."
It is conceded that the method prescribed by the condominium act was not followed. The other method is the class action, assuming that plaintiffs could qualify their action as such according to the requirements of Tex.R.Civ.P. 42, but no attempt was made to bring the suit as a class action. 1 It is argued, however, that the trial court awarded damages only to the owners who were parties, and since the absent owners are not bound by the judgment, no harm has been done and the judgment on behalf of the plaintiffs for their proportionate part of the damages should be allowed to stand. We cannot agree. The judgment also granted a recovery on behalf of all owners against the defendants, and ordered the money expended for certain specific repairs and maintenance of the common elements. Thus, the interests of the absent owners will be affected by the judgment; yet they have not had their day in court. Even under the liberalized version of our ...
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