Sunday Canyon Property Owners Ass'n v. Annett

• Citation: 978 S.W.2d 654
• Decision Date: 31 August 1998
• Docket Number: No. 07-97-0246-CV,07-97-0246-CV
• Parties: SUNDAY CANYON PROPERTY OWNERS ASSOCIATION, Appellant, v. Clarence ANNETT and Inez Annett, Appellees.
• Court: Texas Court of Appeals

Page 654

978 S.W.2d 654

SUNDAY CANYON PROPERTY OWNERS ASSOCIATION, Appellant, v. Clarence ANNETT and Inez Annett, Appellees.

No. 07-97-0246-CV.

Court of Appeals of Texas,

Amarillo.

Aug. 31, 1998.

Mullin Hoard & Brown LLP, David Mullin, Robert R. Bell, Amarillo, for appellant.

Robinson & Fotheringham, Mark D. Tatum, Amarillo, for appellees.

Before QUINN and REAVIS, JJ., and REYNOLDS, ^* Senior Justice.

REYNOLDS, Senior Justice (Retired).

The question in this appeal is whether, as both Sunday Canyon Property Owners Association (SCPOA) and Clarence and Inez Annett (the Annetts) contend, the trial court erred in its declarations regarding modification of the original deed restrictions pertaining to Sunday Canyon Unit No. 1 in Randall County. We will affirm in part and reverse and render in part.

In March of 1965, a residential subdivision situated in Randall County and named Sunday Canyon Unit No. 1 was dedicated by a recorded plat and restrictions. ¹ The plat was expressly adopted as a plan for developing the subdivision by providing for the grant to prospective lot owners of easements for roads, for restrictions, and for covenants running with the land and binding upon each lot owner. The restrictive covenants, eight in number, were binding upon each owner of the lots for a term of ten years, and were automatically extended for additional periods of ten years "unless terminated or changed by a recorded vote by a majority of the then owners of the lots in this addition." The plan also contained this provision:

The covenants, conditions[,] agreements, reservations, restrictions and charges created and established herein for the benefit of said subdivision and each lot therein may be waived, abandoned, terminated, modified, altered or changed as to the whole of said tract or any portion thereof, at any time, with the written consent of the owners of 51% of the lots in the tract. ²

The plan specified that no waiver, abandonment, termination, modification, or alteration shall become effective until the proper written instrument shall be executed and recorded in the deed records of Randall County. ³

In 1966, the Annetts purchased one lot in the subdivision, and in 1976 purchased another one. One lot was improved; the other lot remains unimproved. Clarence Annett acknowledged that they had no problem in agreeing to the original deed restrictions.

By 1983, several problems had arisen, foremost of which was the deterioration of existing roads, which raised the possibility of the loss of postal and school bus services. Voluntary labor and contributions by the residents of the subdivision were inadequate to remedy the situation. Consideration of leaving by many of the residents threatened the survival of the subdivision.

Prompted by these circumstances, the owners of more than 51% of the lots in the subdivision began, in July of 1983, the execution and later, in March of 1984, the recordation of a modification of the plat and restrictions for the subdivision. The modification provided that each lot owner shall be a member of SCPOA, entitled to one vote for each lot owned. SCPOA was empowered to levy charges and assessments against the lots to maintain, preserve and improve the roads, water system, ⁴ and common areas of the subdivision, to provide for architectural control over improvements on the lots, and to promote the health, welfare and safety of the residents. All charges and assessments, together with interest, costs and attorney's fees, were stated to be a lien on each lot against which they were assessed, and the personal obligation of the owner of the lot. The Annetts not only did not sign the modification agreement, but in August of 1983 by means of registered mail, notified one of the signatories of the agreement that they did not wish to became a member of SCPOA or be bound by or subject to any monetary levies.

Nevertheless, the Annetts paid assessments levied against their property until the year 1989, when they, stating that the assessments were paid under protest, filed the action initiating this litigation in September of 1989. Alleging the original deed restrictions were so vague and ambiguous as to be incapable of enforcement, and that the modification created new powers not intended by the original deed restrictions, thereby requiring acceptance by all of the lot owners, they sought the invalidation of the deed restrictions and their modification, the enjoinment of assessments against, and imposition of liens on, their property, and damages, including penalties for usury because of unauthorized charges of interest on assessments levied.

Answering by way of a general denial as well as affirmative defenses, SCPOA counterclaimed against the Annetts. Asserting the restrictive covenants were valid, SCPOA sought recovery of unpaid assessments, interest, attorney's fees and costs.

Hearing evidence, the trial court rendered its judgment. The court decreed that the modification complies with the mechanism for amendment of the original restrictions, and that the modifications are enforceable against the Annetts' property, except that the modification which provides for assessments and charges to constitute a lien against the Annetts' property exceed the scope of allowable amendments under the original restrictions. Thereupon, the court adjudged the assessments and charges were void ab initio and unenforceable. Resultantly, the court permanently enjoined SCPOA from making, collecting or enforcing the charges or assessments on the Annetts' property. All relief sought by the parties and not expressly granted was denied. At the request of the parties, the court made and filed findings of fact and conclusions of law.

Both SCPOA and the Annetts appealed. SCPOA raises two issues; the Annetts present five issues. Inasmuch as the issues are submissions of errors of adjudication by the trial court, they will be referred to as points of error.

First, SCPOA contends the court erred in adjudging that the assessments and charges against the Annetts' property are unenforceable. Second, SCPOA contends that because the modifications are valid and enforceable against the Annetts' property, the court erred in failing to award it both the assessments and attorney's fees.

Essentially, the Annetts present the points, as numbered, that the trial court erred in failing to (2) declare the original deed restrictions unenforceable as to mechanisms for amendment, (1) declare the formation of SCPOA by the modification is void, (3) declare the modified deed restrictions unenforceable as to voting procedures and purposes, (4) find acts of usury committed by SCPOA, and (5) award them reasonable attorney's fees.

As quoted above, the original plat and restrictions provided for the right of owners of 51% of the lots to change the restrictive covenants by their written, executed, and recorded consent. By providing both the right to amend the restrictive covenants and the method of amendment, the instrument, both legally and as found by the trial court, sufficiently set forth an enforceable mechanism for amendment. Couch v. Southern Methodist University, 10 S.W.2d 973, 973-74 (Tex. Comm'n App.1928, judgm't adopted). Thus, the Annetts' second point of error must be, and it is, overruled.

Given the right and method of amendment, the modification was effective as a reformation of the restrictive covenants which is not suggested to be illegal or against public policy. Miller v. Sandvick, 921 S.W.2d 517, 521-22 (Tex.App.--Amarillo 1996, writ denied). Then, the question, posed by SCPOA's first point and the Annetts' second point, is whether the provision for the creation of SCPOA with its powers was authorized and is valid under the original instrument.

The trial court found that although not expressly stated, the purpose of the original plat was to protect the rights of the property owners and to enhance and protect the value, attractiveness and desirability of the lots, the same purpose expressed for the modification in the...