Teal Trading & Dev., LP v. Champee Springs Ranches Prop. Owners Ass'n

• Decision Date: 19 March 2014
• Docket Number: No. 04–12–00623–CV.,04–12–00623–CV.
• Citation: 432 S.W.3d 381
• Parties: TEAL TRADING AND DEVELOPMENT, LP, Appellant v. CHAMPEE SPRINGS RANCHES PROPERTY OWNERS ASSOCIATION, Appellee.
• Court: Texas Court of Appeals

432 S.W.3d 381

TEAL TRADING AND DEVELOPMENT, LP, Appellant

v.CHAMPEE SPRINGS RANCHES PROPERTY OWNERS ASSOCIATION, Appellee.

No. 04–12–00623–CV.

Court of Appeals of Texas,

San Antonio.

March 19, 2014.

From the 216th Judicial District Court, Kendall County, Texas, Trial Court No. 06–500A, Michael Peden, Judge Presiding.¹

Richard C. Mosty, Mosty Law Firm, P.C., Kerrville, TX, Dan Pozza, Law Offices of Dan Pozza, San Antonio, TX, for Appellant.

David F. Johnson, Winstead PC, Fort Worth, TX, Randall B. Richards, The Law Offices Of Randy Richards, Boerne, TX, for Appellee.

Sitting: SANDEE BRYAN MARION, Justice, REBECA C. MARTINEZ, Justice, LUZ ELENA D. CHAPA, Justice.

OPINION

Opinion by: LUZ ELENA D. CHAPA, Justice.

Teal Trading and Development, LP appeals from the trial court's declaratory judgment in favor of Champee Springs Ranches Property Owners Association. The trial court's judgment declared that Teal Trading was estopped by deed to challenge the validity and enforceability of a property restriction within its chain of title. On appeal, Teal Trading contends the trial court erred by granting Champee Springs's motion for summary judgment, by denying its motions for summary judgment, and by awarding attorney's fees to Champee Springs. We hold that neither Champee Springs nor Teal Trading carried their burdens on summary judgment. Because Teal Trading is not estopped by deed from challenging the validity and enforceability of the restriction, we reverse the trial court's judgment and remand the cause for proceedings consistent with this opinion.

Background

Teal Trading owns around 1,832 contiguous acres of land in the Texas Hill Country. The majority of its property lies in Kerr County, Texas, although some portion of its land spills into neighboring Kendall County, Texas.

Champee Springs represents residents of the Champee Springs Ranches subdivision and The Quarry at Champee Springs Ranches subdivision, which are located in Kendall County. SeeTex. Prop.Code Ann. § 204.004 (West 2007).

660 acres of Teal Trading's property and some or all of the land now comprising the subdivisions represented by Champee Springs were previously owned by E.J. Cop, who purchased 9,245.95 acres of land in Kendall and Kerr Counties on June 3, 1998. Cop platted and developed his property as Champee Springs Ranches. On June 4, 1998, Cop signed a “Declaration of Covenants, Conditions and Restrictions,” which was recorded in the deed records of Kendall and Kerr Counties. SeeTex. Prop.Code Ann. § 202.001(1) (West Supp.2013). The Declaration contains the property restriction at issue in this case. In relevant part, the Declaration states:

DECLARATION OF COVENANTS, CONDITIONS AND RESTRICTIONS

* * *

THAT WHEREAS, E.J. Cop, hereinafter called the Declarant, is the owner of all that certain 9245.95 acres, more or less, tract of land (“PROPERTY”) located in Kendall and Kerr Counties, Texas as more particularly described on Exhibit “A” attached hereto and incorporated herein for all purposes.

WHEREAS, the Declarant will convey the PROPERTY, subject to certain protective covenants, conditions, restrictions and easements as hereinafter set forth;

NOW, THEREFORE, it is hereby declared that all of the PROPERTY shall be held, sold, and conveyed subject to the following easements, restrictions, covenants, and conditions, which are established for the purposes of creating and carrying out a uniform plan for the improvement, development and sale of the PROPERTY and for the further purpose of protecting the value attractiveness and desirability of the PROPERTY for the mutual benefit of the owners of same and accordingly shall run with the title to the PROPERTY or any part thereof and bind the Declarant, his heirs, successors and assigns and all owners and purchasers of the PROPERTY, or any part thereof, their, [sic] heirs, successors, executors, administrators and assigns.

* * *

2. There is hereby reserved unto Declarant a one (1) foot easement for precluding and prohibiting access to the PROPERTY or Ranger Creek Road or Turkey Knob Road by adjoining property owners other than Declarant and Declarant's express assigns. This easement is inside of and contiguous to the perimeter of the PROPERTY as described in exhibit “A” hereto, provided that no easement is reserved over, across or upon any public road right-of-way which is dedicated by and shown on that certain Plat of Champee Springs Ranches, a subdivision in Kendall and Kerr Counties, Texas, of record in Volume 3, Page 69, of the Plat Records of Kendall County, Texas, and further provided Tract 4 of said Champee Springs Ranches subdivision shall be entitled to one access entrance across the restrictive easement along the southwestern boundary line of said Tract 4, but none other access without Declarant's express written consent thereto.

We refer to the restriction in paragraph two as the “non-access restriction.” The parties appear to agree that the non-access restriction prohibits any person, aside from Cop or his assignees, owning land along the original edge of the Cop tract from permitting other persons to have access across the edge of their property.²

Cop then began to sell lots from his property. Because Champee Springs's estoppel by deed argument relies on the deeds within the chain of title from Cop to Teal Trading, we will summarize the conveyances in a timeline:

• June 3, 1998—E.J. Cop purchased 9,245.95 acres of land in Kendall and Kerr Counties.

• June 4, 1998—Cop signed the Declaration containing the non-access restriction.

• July 9, 1998—Cop sold 1,328 acres to C.R. Luigs.

• July 10, 1999—Luigs sold approximately 660 acres in Kerr County to Marrs and Marianne Bowman. The Bowmans platted the 660 acres as Privilege Creek Ranches, but did not sell any lots.

• July 11, 2006—Mallard Royalty Partners ³ purchased the Bowmans' tract. The Bowmans executed separate deeds conveying their respective interests.

• July 12, 2006—Mallard sold the 660 acres, and an additional 1,173 acres that had not been owned by Cop, to BTEX Ranch, LP.

• July 17, 2006—BTEX executed a deed of trust covering all of its property. BTEX attempted to develop its property as “Boerne Falls.”

• November 12, 2009—Teal Trading acquired the deed of trust and foreclosed on BTEX's interest.

We will refer to the 660 acre tract sold by Luigs and now owned by Teal Trading as the “Privilege Creek tract.” All of the deeds in the chain of title from Cop to Teal Trading state, in some form or another, that the property conveyed is “subject to” the restrictions in the Declaration filed by Cop.

When Cop acquired 9,245 acres, the portion of his property that would later be sold as the Privilege Creek tract was at the northwestern end of his tract. Therefore, the non-access restriction runs along the edge of the Privilege Creek tract to the extent that the edge of Privilege Creek tract was also the edge of the original Cop tract.

The additional 1,173 acres owned by Teal Trading adjacent to the Privilege Creek tract were not part of Cop's original 9,245 acres. Therefore, Teal Trading's additional acreage is, in some sense, “divided” from the Privilege Creek tract by the non-access restriction. By contrast, the Champee Springs Ranches subdivision also lies directly adjacent to the Privilege Creek tract. However, it is not “divided” from the tract by the non-access restriction because the property comprising the subdivision was also part of Cop's original tract.

The Present Dispute

After BTEX acquired its property from Mallard, BTEX began to develop the entire property as a single, contiguous residential subdivision. BTEX then built a construction road that connected Turkey Knob Road to Lane Valley Road. Turkey Knob Road is located within the Privilege Creek tract and the Champee Springs subdivisions and gives those tracts access to Interstate 10, but it does not otherwise cross the “dividing line” created by the non-access restriction. Lane Valley Road is on the other side of the “dividing line” created by the non-access restriction. To enforce the restriction, Champee Springs intervened in a lawsuit filed by Kendall County against BTEX relating to BTEX's development. The trial court denied Champee Springs's intervention, but the court severed its claims into this cause. During this litigation, Teal Trading foreclosed on BTEX's interest and intervened in this lawsuit.

Champee Springs's petition sought a declaratory judgment that BTEX (and later Teal Trading) was bound by the non-access restriction and estopped to deny its force, validity, and effect, and because they were so bound, the restriction was enforceable against them. Teal Trading's petition-in-intervention denied that it was bound by the restriction, and it sought a declaratory judgment that the non-access restriction was void as an unreasonable restraint against alienation and that Champee Springs had waived the right to enforce the non-access restriction and was thus estopped from enforcing the restriction.

The parties each filed motions for summary judgment. The sole ground raised by Champee Spring's motion for summary judgment was the “threshold” issue of whether Teal Trading was estopped by deed from challenging the validity and enforceability of the non-access restriction. Teal Trading's motion for summary judgment and supplemental motion for summary judgment, on the other hand, raised six grounds for summary judgment, arguing that the non-access restriction was an invalid easement, that members of Champee Springs had waived the restriction's enforcement, and that the restriction was void as against public policy. Champee Springs filed a response contesting each ground raised by Teal Trading. The trial court granted Champee Springs's motion and denied Teal Trading's motions. After holding a hearing, the court then awarded attorney's fees to Champee Springs.

Standard of Review

We review the trial court's summary judgment rulings de novo. Provident Life & Acc. Ins....