Voice of Cornerstone Church v. Pizza Prop.

• Decision Date: 10 March 2005
• Docket Number: No. 03-04-00173-CV.,03-04-00173-CV.
• Citation: Voice of Cornerstone Church v. Pizza Prop., 160 S.W.3d 657 (Tex. 2005)
• Parties: The VOICE OF the CORNERSTONE CHURCH CORPORATION, Appellant, v. PIZZA PROPERTY PARTNERS, David J. Miller, John W. Hoberman, John G. Farrar, Exxon Mobil Corporation and ExxonMobil Oil Corporation, Appellees.
• Court: Texas Supreme Court

160 S.W.3d 657

The VOICE OF the CORNERSTONE CHURCH CORPORATION, Appellant, v.PIZZA PROPERTY PARTNERS, David J. Miller, John W. Hoberman, John G. Farrar, Exxon Mobil Corporation and ExxonMobil Oil Corporation, Appellees.

No. 03-04-00173-CV.

Court of Appeals of Texas, Austin.

March 10, 2005.

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Jose Luis Lopez, Austin, for Appellant.

David L. Brenner, Burns, Anderson, Jury & Brenner, LLP, Austin, for Appellees.

Mark R. Robeck, Houston, Bob E. Shannon, Allison L. Bowers, Scott Powers, Baker & Botts, Austin, for Exxon.

Before Chief Justice LAW, Justices B.A. SMITH and PEMBERTON.

OPINION

BOB PEMBERTON, Justice.

In this appeal, we review a permanent injunction enforcing a restrictive covenant to prohibit activities of a church located on the former site of the Austin petroleum "tank farm."Although the backdrop of this appeal involves not only religious but also environmental concerns, the issues properly preserved on appeal and within our power to consider are exclusively these: (1) whether the church, as a purchaser charged with notice, is bound by a restrictive covenant on the property; (2) whether the district court properly determined that the church's use of the property violated the restrictive covenant; and (3) whether the district court could constitutionally enforce a facially neutral and nondiscriminatory restrictive covenant against a church, a proposition that Texas courts have long accepted.Because the district court correctly resolved these issues, we affirm the judgment.

BACKGROUND

Because the restrictive covenant we consider in this case resulted from a settlement agreement with the former Texas Water Commission concerning remediation of an industrial brownfield, we begin with a brief introduction to the ongoing policy developments in that area of environmental law.Industrial brownfields are abandoned, idled, or underused industrial and commercial sites where expansion or redevelopment is complicated by real or perceived environmental contamination that can add cost, time, or uncertainty to a redevelopment project.SeeFrona M. Powell, Amending CERCLA to Encourage the Redevelopment of Brownfields: Issues, Concerns, and Recommendations, 53 Was. U.J. Urb. & Contemp.Law 113, 113-14 (1998).The federal government's emphasis on permanent cleanup of brownfields to leave land available for unrestricted use has gradually faded over time, as the costs and difficulties of achieving such a goal became clear.SeeJim Spinaastra, et al., Industrial Controls: Brownfields Superweapon or Ultimate Trojan Horse?, 15 Nat. Resources & Env't, 104, 104 (2000);see alsoComprehensive Environmental Response, Compensation, and Liability Act (CERCLA), 42 U.S.C.A. §§ 9601-9675(West 1995& Supp.2004).Among other reasons, this policy shift resulted from concerns of the polluting parties over a requirement to pay the costs to clean their sites to levels safe for residential use when those sites were likely to remain industrial for the foreseeable future.SeeSpinaastra, supra, at 104.As a result, the federal government began to encourage the use of land and water-use restrictions to control residential exposure so as to open up previously idle brownfields for industrial redevelopment.Seeid.;see alsoFrona, supra, at 113-14.Failure to maintain land restrictions may subject the polluter to liability under CERCLA or state environmental law.SeeSpinaastra, supra, at 106.In 1999, Texas implemented rules to reflect this new approach to brownfield redevelopment.See30 Tex. Admin. Code §§ 350.1-.135(2004)(Texas Risk Reduction Program);see especially id.§ 350.1("The program also sets reasonable response objectives that will protect human health and the environment and preserve the active and productive use of land.").

Before 1992, Mobil Oil, a predecessor to ExxonMobil Oil Corporation("ExxonMobil"),¹ owned and operated an oil pipeline terminal that served as a bulk fuel storage and transfer station on property near the intersection of Airport Boulevard and Springdale Road in east Austin.Neighbors to the property complained about soil and groundwater contamination, resulting in litigation before the Texas Water Commission, the predecessor agency to the Texas Commission on Environmental Quality(the Commission).In April 1992, all parties to that litigation reached a settlement, which the Commission memorialized in an agreed order.According to the order, the Commission found documented soil and groundwater contamination on the property in violation of state water-quality regulations.The Commission thus ordered Mobil Oil to submit a pollution remediation plan with provisions for quarterly monitoring of the corrective measures.

Although the settlement agreement is not in the record before us, the parties do not appear to dispute that Mobil Oil's duties under the agreement necessitated that it impose a restrictive covenant to prohibit uses that could create environmental risks before selling or transferring the property.Thus, in 1997, Mobil Oil sold the property to Pizza Property Partners by special warranty deed with the following restrictive covenant:

As part of the consideration for this conveyance, the Grantee [Pizza Property Partners] for itself, its successors or permitted assigns, covenants and agrees that from the date of this Deed the property shall be used for commercial/light industrial purposes only and neither the property herein conveyed nor any part thereof shall at any time be used for (1) the storage and sale of motor fuels; (2) for residential purposes, healthcare facilities, daycare facilities, schools, playgrounds; (3) that irrigation and drinking water wells shall be prohibited; and (4) that subsurface structures, including without limitation basements and below ground parking but excluding building foundations are prohibited.This covenant shall survive delivery of the Deed and is to run with the land herein conveyed and a similar restrictive covenant shall be inserted in any deed or lease or instrument conveying or demising the property herein conveyed or any part thereof.

For its part, Mobil Oil agreed to continue remediation and monitoring of the property with respect to the petroleum contamination it caused "to the extent required and in a manner approved by the governmental authority exercising jurisdiction over the matter, whether federal, state or local, or its designee."Pizza Property Partners also released Mobil Oil from any liability "related to the existence or migration of petroleum contamination which arose out of" Mobil Oil's use of the property.

Pizza Property Partners and Mobil Oil filed with the Travis County Clerk several other documents memorializing the restrictive covenant.First, they created a "Post-Closing Use Restriction Agreement," reiterating the promises made in the restrictive covenant filed with the special warranty deed.Second, they executed an "Agreement for Access to Premises after Transfer of Title," in which Pizza Property Partners acknowledged that the property had or

may have been impacted by petroleum contamination and that Seller [Mobil Oil] is or will be undertaking, with reasonable diligence, Corrective Action ... with respect to petroleum contamination caused by Seller's use of the premises which occurred or commenced occurring before closing, if and to the extent required and in the manner approved by the governmental authority exercising jurisdiction over the matter, whether federal, state or local, or its designee....

The parties defined "corrective action" in the document as "active remediation, passive remediation, investigation and/or monitoring of petroleum contamination."Mobil Oil and Pizza Property Partners then agreed that such corrective action would continue until the appropriate governmental authority would advise Mobil Oil that corrective action had been "completed to that authority's satisfaction" or until such time that Mobil Oil would determine that the environmental condition of the property satisfies regulatory requirements.As a result, Pizza Property Partners granted Mobil Oil access to the property to engage in corrective action, agreed to cooperate in the filing of notices and deed acknowledgments, and consented to bind itself and any subsequent purchaser of the property to submit future construction plans to Mobil Oil to accommodate Mobil Oil's corrective action.By its express terms, the agreement indicates that the parties intended to make it binding on all successors-in-interest to the parties.

On January 26, 2000, Pizza Property Partners conveyed the property to the Voice of the Cornerstone Church Corporation("Cornerstone") by warranty deed with vendor's lien, subject to "any and all restrictions, encumbrances, easements, covenants and conditions" as filed with the Travis County Clerk.The deed did not further elaborate on the restrictive covenant or explicitly refer to the instruments filed with the County Clerk.

Cornerstone is an incorporated religious group organized, according to its articles of incorporation, "to preach the [G]ospel of the [K]ingdom."Its primary expression of this function is by engaging in religious worship.It was formed in 1995, although the congregation had been informally holding services in members' houses earlier.At the time of the deposition of Juan Ramos, Cornerstone's pastor, the church had approximately 75 members but no paid staff.

No party disputes the facts concerning Cornerstone's use of the property.At the time of purchase, the property contained several old industrial warehouses.Cornerstone converted the largest of these buildings into a church sanctuary, removing walls to create a larger space.It also constructed a small kitchen attached to the sanctuary to provide meals for its members on Sundays.It received permits from the City of Austin for those renovations.Cornerstone also created a baptismal pool...