Storck v. Tres Lagos Prop. Owners Ass'n, Inc.

• Decision Date: 08 August 2014
• Docket Number: No. 06–13–00066–CV.,06–13–00066–CV.
• Parties: Carl STORCK and Vicki Storck, Appellants v. TRES LAGOS PROPERTY OWNERS ASSOCIATION, INC., Appellee.
• Court: Texas Court of Appeals

442 S.W.3d 730

Carl STORCK and Vicki Storck, Appellants

v.TRES LAGOS PROPERTY OWNERS ASSOCIATION, INC., Appellee.

No. 06–13–00066–CV.

Court of Appeals of Texas, Texarkana.

Submitted June 11, 2014.

Decided Aug. 8, 2014.

Rehearing Overruled Sept. 16, 2014.

Reconsideration En Banc Overruled Oct. 7, 2014.

Gene Stump, Attorney at Law, Mount Vernon, TX, for Appellants.

Larry R. Wright, Attorney at Law, Winnsboro, TX, for Appellee.

Before MORRISS, C.J., CARTER and MOSELEY, JJ.

OPINION

Opinion by Justice CARTER.

I. Background

Carl Storck and Vicki Storck¹ purchased five lots² in the Tres Lagos subdivision in Franklin County in 2008 and moved into a home located on the property. Subdivision property ownership and membership in the Tres Lagos Property Owners' Association, Inc. (Association) requires compliance with certain covenants and restrictions.³ Based on certain actions taken by the Franklin County Commissioners' Court in 2002 to “deplat” the five lots Storck purchased in 2008, Storck did not believe those lots were subject to subdivision restrictions, covenants, dues or fees. Accordingly, Storck operated a commercial business⁴ on the five lots at issue and never paid dues for those lots.⁵

After Storck had been living in the subdivision for approximately one year, Storck sued the Association, complaining that it violated its bylaws and articles of incorporation by (1) failing to maintain roadways, fencing, and the Association's swimming pool, (2) soliciting proxy votes, (3) holding Association meetings in which matters were decided in the absence of a quorum, (4) failing to name a registered agent for service of process, (5) failing to provide proper notice of meetings in violation of the Texas Open Meetings Act, (6) failing to obtain and/or maintain liability insurance for the Association's swimming pool, (7) failing to file not-for-profit organization filings required by the Internal Revenue Service, and (8) amending the covenants and restrictions of the Association without a vote by members. Storck sought injunctive relief that would require the Association to rectify all activities and/or to be replaced or monitored by the trial court.

The Association filed a counterclaim for declaratory judgment, seeking a declaration that (1) the five lots Storck purchased in 2008 are subject to all easements, rights-of-way, covenants, and restrictions applicable to the subdivision, including all assessments, dues, and late fees owed by virtue of Association membership and (2) the deplat order of the Commissioners' Court is void to the extent it may be interpreted to cancel the covenants and restrictions as they applied to the five lots in question. The counterclaim also alleged that Storck removed and/or destroyed the perimeter fence on the five lots in question and sought a money judgment for the repair or replacement of the fence. The Association further sought to enjoin Storck from denying the Association access across the designated easement areas for the purposes of replacing and maintaining the perimeter fence in order to secure the subdivision.

Storck filed a general denial answer in response to the Association's counterclaim. In May 2011, the trial court entered an order on the Association's counterclaim declaring that the Commissioners' Court did not have jurisdiction or authority to cancel, modify, or otherwise change or limit the subdivision restrictions, covenants, or conditions with respect to lots 93 through 97 of the Tres Lagos Subdivision. Accordingly, the trial court found that the subject lots continuously have been subject to the obligations imposed under the covenants and restrictions applicable to the subdivision.

In May 2013, after a bench trial, the trial court entered its judgment (1) finding that all lots owned by Storck that are within the subdivision are subject to the covenants, restrictions, and easements of the subdivision; (2) permanently enjoining Storck from operating a commercial business “on lots in the Subdivision,” because the operation of such business violates the subdivision covenants and restrictions; (3) finding that Storck owes unpaid dues and assessments in the sum of $4,000.00; (4) finding that the Association's board of directors is composed of James Rose, Barbara Lester, Jeff Lester, and Gail Cerveny; (5) finding that the Association is not subject to the Texas Open Meetings Act; and (6) finding that the Association's bylaws are not a dedicatory instrument required to be filed in the Office of the County Clerk of Franklin County. The trial court further determined that the Association owns the perimeter fence and, thus, has the right to replace and reinstall the fence along the northern boundary of lots 93 through 97. However, the trial court did find that Storck may, at his own expense, place a gate at the intersection of the existing gravel drive and FM 2723 for ingress and egress. Finally, the judgment awarded attorney fees to the Association.

At Storck's request, the trial court entered findings of fact and conclusions of law. Thereafter, Storck filed a motion for new trial challenging the trial court's findings and conclusions, alleging the affirmative defense of the statute of limitations, and otherwise alleging the existence of new evidence, i.e., that the Association's members formed an election committee and elected a new board of directors. Thereafter, Storck filed his first amended motion for new trial raising an additional allegation of new evidence, i.e., that a member of the Association's board operates a commercial business within the subdivision. In addition, Storck filed a motion for judgment notwithstanding the verdict. After a hearing, the trial court denied Storck's post-trial motions.

On appeal, Storck seeks reversal because (1)(a) the Association's board of directors was not validly elected and (b) because a summary judgment order in a different lawsuit found that the Association's board is not valid, (2) there is new evidence that an Association member operates a commercial business in the subdivision, (3)(a) Storck is a bona fide innocent purchaser and (b) all claims alleged in the counterclaim are barred by limitations, and (4) the trial court abused its discretion in failing to address the inaction of the Association's board of directors.

II. The Election of the Association's Board of Directors in July 2012 Was Invalid

A. Standard of Review

Findings of fact entered in a case tried to the court, as here, “ ‘are of the same force and dignity as a jury's answers to jury questions.’ ” Lambright v. Trahan, 322 S.W.3d 424, 430 (Tex.App.-Texarkana 2010, pet. denied) (quoting .39 Acres v. State, 247 S.W.3d 384, 387 (Tex.App.-Texarkana 2008, pet. denied) ). “The trial court's findings of fact are reviewable for legal and factual sufficiency ... by the same standards that are applied in reviewing the legal or factual sufficiency of the evidence supporting a jury's answer to a jury question.” .39 Acres v. State, 247 S.W.3d 384, 387 (Tex.App.-Texarkana 2008, pet. denied) (citing Ortiz v. Jones, 917 S.W.2d 770, 772 (Tex.1996) ; Catalina v. Blasdel, 881 S.W.2d 295, 297 (Tex.1994) ); see Trahan, 322 S.W.3d at 430.

The test for legal sufficiency is “whether the evidence at trial would enable reasonable and fair-minded people to reach the verdict under review.” City of Keller v. Wilson, 168 S.W.3d 802, 827 (Tex.2005). In our review, we must credit evidence favorable to the judgment if a reasonable fact-finder could, disregard contrary evidence unless a reasonable fact-finder could not, and reverse the fact-finder's determination only if the evidence presented in the trial court would not enable a reasonable and fair-minded fact-finder to reach the judgment under review. Id. ; Trahan, 322 S.W.3d at 430. We will sustain the appellants' legal-sufficiency challenges if the record reveals (1) the complete absence of evidence of a vital fact, (2) that the court is barred by rules of law or evidence from giving weight to the only evidence offered to prove a vital fact, (3) that the evidence offered to prove a vital fact is no more than a mere scintilla, or (4) that the evidence conclusively establishes the opposite of a vital fact. See Wilson, 168 S.W.3d at 810. “[M]ore than a scintilla of evidence exists if the evidence ‘rises to a level that would enable reasonable and fair-minded people to differ in their conclusions.’ ” Ford Motor Co. v. Ridgway, 135 S.W.3d 598, 601 (Tex.2004) (quoting Merrell Dow Pharm., Inc. v. Havner, 953 S.W.2d 706, 711 (Tex.1997) (quoting Burroughs Wellcome Co. v. Crye, 907 S.W.2d 497, 499 (Tex.1995) (quoting Transp. Ins. Co. v. Moriel, 879 S.W.2d 10, 25 (Tex.1994) ))).

When considering a factual sufficiency challenge, we must consider and weigh all the evidence, not just the evidence that supports the trial court's judgment. Trahan, 322 S.W.3d at 430. We will set aside the judgment only if it is so contrary to the overwhelming weight of the evidence that it is clearly wrong and unjust. Mar. Overseas Corp. v. Ellis, 971 S.W.2d 402, 406–07 (Tex.1998). Under either standard of review, we must be mindful that the trial court, as finder of fact, is the sole judge of the credibility of the witnesses and the weight to be given their testimony. McGalliard v. Kuhlmann, 722 S.W.2d 694, 696 (Tex.1986).

We review de novo the trial court's conclusions of law. BMC Software Belgium, N.V. v. Marchand,

83 S.W.3d 789, 794 (Tex.2002). Although appellants may not challenge a trial court's conclusions of law for factual sufficiency, an appellate court may review the trial court's legal conclusions drawn from the facts to determine whether the conclusions are correct. Id.

The Association contends that, because Storck failed to make a specific complaint or objection to any findings of fact regarding its first appellate point, such findings are conclusively established. See Looney v. Gibraltar Sav. Ass'n., 695 S.W.2d 336, 340 (Tex.App.-Amarillo 1985, no writ) (factual findings not attacked on...