Severs v. Mira Vista Homeowners Ass'n, Inc.

• Decision Date: 06 September 2018
• Docket Number: No. 02-16-00157-CV,02-16-00157-CV
• Parties: Jeffrey A. SEVERS and Lila Severs, Appellants v. MIRA VISTA HOMEOWNERS ASSOCIATION, INC., Appellee Mira Vista Homeowners Association, Inc. ; Robert Gaudin and Linda Gaudin, Cross-Appellants v. Jeffrey A. Severs and Lila Severs, Cross-Appellees
• Court: Texas Court of Appeals

559 S.W.3d 684

Jeffrey A. SEVERS and Lila Severs, Appellants

v.MIRA VISTA HOMEOWNERS ASSOCIATION, INC., Appellee

Mira Vista Homeowners Association, Inc. ; Robert Gaudin and Linda Gaudin, Cross-Appellants

v.Jeffrey A. Severs and Lila Severs, Cross-Appellees

No. 02-16-00157-CV

Court of Appeals of Texas, Fort Worth.

Delivered: September 6, 2018

ATTORNEYS FOR APPELLANTS/CROSS-APPELLEES JEFFREY A. SEVERS AND LILA SEVERS: MATTHEW W. BOBO, CHRIS ESPINOSA, LAW OFFICE OF MATTHEW BOBO, PLLC, FORT WORTH, TEXAS.

ATTORNEYS FOR APPELLEE/CROSS-APPELLANTS MIRA VISTA HOMEOWNERS ASSOCIATION, INC.: MICHAEL A. YANOF, JAMES L. SOWDER, CASSIE J. DALLAS, THOMPSON, COE, COUSINS & IRONS, L.L.P., DALLAS, TEXAS.

ATTORNEYS FOR CROSS-APPELLANTS ROBERT AND LINDA GAUDIN: DAVID J. DREZ III, R. CASEY O'NEILL, WICK PHILLIPS GOULD & MARTIN, LLP, FORT WORTH, TEXAS.

Before Meier, Gabriel, and Pittman, JJ.

OPINION

Opinion by Justice Pittman

INTRODUCTION

Appellants/Cross-Appellees Jeffrey A. Severs and Lila Severs filed a lawsuit against their neighbors, Cross-Appellants Robert and Linda Gaudin, and their homeowners association, Appellee/Cross-Appellant Mira Vista Homeowners Association (Mira Vista) to prevent the Gaudins from constructing a second-story addition over their pool cabana. The Severses claimed that the Gaudins' second-story addition both substantively and procedurally violated the neighborhood’s "Declaration of Covenants, Conditions and Restrictions for Mira Vista" (CCRs)—substantively because the construction was within a fifteen-foot side setback restriction in the CCRs and procedurally because it deviated from the design-and-construction approval process provided for in the CCRs. However, because Mira Vista’s Architectural Control Committee had already approved of the Gaudins' second-story addition, the strategy of the Severses' lawsuit was to enforce the CCRs against the Gaudins vis-à-vis Mira Vista.¹

The Gaudins and Mira Vista asserted counterclaims to recover their reasonable attorney’s fees under the prevailing-party provision of article 12.05 of the CCRs and the Uniform Declaratory Judgments Act, located in chapter 37 of the civil practice and remedies code. See Tex. Civ. Prac. & Rem. Code Ann. §§ 37.002, .009 (West 2015). After the parties engaged in some discovery, the Severses nonsuited their claims against the Gaudins without prejudice, and the trial court signed an order dismissing the Severses' suit against the Gaudins. The order also stated that the parties bear their own attorney’s fees, which seemingly dismissed the Gaudins' counterclaim for attorney’s fees.

The trial court disposed of the Severses' claims against Mira Vista when it granted Mira Vista’s motion for summary judgment, but in doing so the trial court expressly did not rule on Mira Vista’s counterclaim for attorney’s fees. There remained confusion regarding the Gaudins' and Mira Vista’s counterclaims for attorney’s fees, which led to additional motions, hearings, and a three-page letter from the trial court explaining that it was denying the Gaudins' and Mira Vista’s requests for attorney’s fees because the court did not believe that any party had prevailed and that the equities of the case did not warrant an award of attorney’s fees. Subsequently, the court signed an interlineated final order denying all of the parties' requests for attorney’s fees.

On appeal, the Severses raise ten issues challenging summary judgment on each of their claims, but the Severses' primary challenge concerns their breach-of-contract claim under the CCRs. On cross-appeal, the Gaudins raise two issues and Mira Vista raises one issue with both seeking to recover their reasonable attorney’s fees, which they believe were wrongly denied. For the reasons set forth below, we overrule the Severses' issues and affirm summary judgment on all of their claims, we reverse the trial court’s denial of Mira Vista’s request for attorney’s fees, and we affirm the trial court’s denial of the Gaudins' request for attorney’s fees. Accordingly, we remand for further proceedings necessary to determine a reasonable amount of attorney’s fees to be awarded to Mira Vista.

FACTUAL AND PROCEDURAL BACKGROUND

I. Mira Vista is Created and Governed by the CCRs

Mira Vista is an upscale, multi-phase subdivision of single-family residences located in Fort Worth, Texas. Like many upscale communities, Mira Vista has CCRs that created the homeowners' association (HOA), that contain certain restrictive covenants, and that set forth the rights and duties of its homeowners and the HOA. Article 12.05 of the CCRs provides that any owner may initiate a legal action to enforce the CCRs and that "[w]ith respect to any litigation hereunder, the prevailing party shall be entitled to recover reasonable attorney’s fees from the nonprevailing party." The CCRs do not, however, define "prevailing party."

Article 10 of the CCRs established an Architectural Control Committee (ACC)—a body with authority to review and approve or deny proposed buildings, structures, and other improvements. Article 10 provides that when making its determinations, the ACC will consider such factors as the quality of the improvement’s materials and workmanship, its aesthetic conformance with the rest of the development, and its location on the plot and possible effects on neighbors. Despite this authority, the CCRs explain that the ACC "shall not have unbridled discretion with respect to taste, design and any absolute standards specified [in the CCRs]," but it "shall ... use its best efforts to balance the equities between matters of taste and design (on the one hand) and use of private property (on the other hand)."

Article 10(e) also permits the ACC to publish and promulgate architectural standards for guidance to homeowners for improving their property and states that such standards "shall supplement these Covenants and Restrictions and are incorporated herein by reference." Accordingly, the ACC published a set of Design Guidelines (Guidelines) in January 2007. Relevant here is section 2.1, which requires a minimum fifteen-foot side setback for each home, and section 5, which requires a design-and-construction approval process that includes, in part, the submission of building plans to the ACC prior to the commencement of construction. However, section 5.15 also gives the ACC the right to "waive or vary any of the procedures or standards set forth herein at its discretion , for good cause shown." [Emphasis added].

II. The Gaudins and Severses Move Into Mira Vista

On December 7, 2006, Robert and Linda Gaudin bought a home in Mira Vista that had been built in 2000 with an eight-foot side setback. This eight-foot setback apparently complied with the minimum side setback requirements at the time and was grandfathered in when the Guidelines were subsequently passed. Six months after moving in, the Gaudins submitted plans to the ACC to build a pool and one-story cabana—an entirely new structure that would be placed at the same eight-foot side setback—no closer to the property line than their existing home and conforming with all other guidelines and zoning requirements. Thus, the ACC approved the plan because the cabana and would simply extend straight back from the rear of the Gaudins' home.²

Six years later, Jeffrey and Lila Severs became interested in purchasing the lot directly south of the Gaudins' residence. The Severses obtained copies of the CCRs and Guidelines, and influenced by the Guidelines' fifteen-foot side setback provision, the Severses purchased the lot on July 31, 2013, despite the facts that (1) both the Gaudins' home and cabana were openly and obviously only eight feet away from the property line, and (2) the Severses' own home was openly and obviously only eight feet away from the property line.

III. The Dispute

The instant dispute began on March 4, 2014, when the Severses noticed a construction dumpster in front of the Gaudins' house. After being notified of the construction without having approved any building plans, the ACC immediately halted construction, requested a building plan, and fined the builder $250. Three days later, on March 7, 2014, after receiving payment for the fine and a copy of the building plan, the ACC began evaluating the Gaudins' proposed improvement—a second-story addition above the existing and now almost seven-year old cabana. Because the renovation would not alter home’s existing footprint—that is, the renovation was vertical and the structure would remain setback eight feet from the Severses' property line—and because the second-story addition complied with all of the CCRs and Guidelines' other height, material, and color guidelines, the ACC sent the Severses a letter dated March 11, 2014, informing them that the ACC was permitting construction to continue during its evaluation process and that there would be a March 21, 2014 meeting to take place at the Gaudins' home at 10:00 a.m. to discuss issues related to the construction.

The Severses attended the construction meeting where they learned that the Gaudins had not obtained a variance to complete the second-story addition within the fifteen-foot side setback. The Severses began contacting members of the HOA and ACC to voice their objections to the second-story addition. The Severses attended the April 1, 2014 HOA meeting where they asserted their objections that the Gaudins' second-story addition was built in violation of section 2.1’s fifteen-foot side setback and that it would alter their view from, and impact the aesthetic value of, their backyard and pool. In response, the ACC held an emergency meeting on April 3, 2014, which was attended by Mrs. Gaudin and the Severses and their respective counsel.

The ACC then held another meeting on April 16, 2014 to resolve the issue. In an April 17, 2014 letter, the ACC explained that it had considered the Severses' objections in their decision-making process but was nonetheless approving the Gaudins' second-story addition because...