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Date: 09-22-2022
Case Style:
Zachary Myers and Dart Frog, LLC v. Tahitian Village Property Owners Association, Inc.; and Tahitian Village Architectural Control Committee
Case Number: 03-21-00105-CV
Judge: Chari L. Kelly
Court:
Court of Appeals Third Appellate District of Texas at Austin
On appeal from the 423RD DISTRICT COURT OF BASTROP COUNTY
Plaintiff's Attorney:
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Defendant's Attorney: Mr. David F. Bragg
Description:
Austin, Texas – Real Estate lawyer represented Appellants with a breach of the restrictive covenants suit.
Myers owns a lot in the Tahitian Village subdivision. Dart Frog, a Texas limited
liability company that Myers alleged is “one of his companies,” owns six lots in the same
subdivision. In September 2020, Myers and Dart Frog sued Tahitian Village Property Owners
Association (the POA) and the Tahitian Village Architectural Control Committee (the ACC)
seeking a declaration that the POA did not have the authority to impose fines related to their
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residential construction activities in the subdivision and could not enforce architectural
guidelines separate from those contained in the subdivision’s restrictive covenants. Myers and
Dart Frog also sought a declaration that if the POA had the authority to assess construction
related fines, it had to first provide notice and an opportunity to cure the violation. Myers and
Dart Frog alleged that the POA breached the Texas Property Code by imposing arbitrary,
capricious, and discriminatory fines and breached the subdivision’s restrictive covenants by
imposing fines and adopting architectural restrictions separate from those contained in the
subdivision’s restrictive covenants.
In February 2020, Myers and Dart Frog amended their petition to bring a putative
class action on behalf of all property owners in the Tahitian Village subdivision. Myers and Dart
Frog dropped their claims for declaratory relief and asserted a cause of action against both the
POA and the ACC for breach of the subdivision’s restrictive covenants. Myers and Dart Frog
alleged that the restrictive covenants do not authorize the POA or the ACC to require property
owners to comply with any architectural or construction related rules other than those contained
in the subdivision’s restrictive covenants and that the POA and the ACC breached the restrictive
covenants by requiring owners to submit anything other than plans, specifications, and a plat to
obtain architectural approval for residential construction in the subdivision. Myers and Dart
Frog also alleged that the POA and the ACC breached the subdivision’s restrictive covenants by
requiring property owners to pay unauthorized assessments, fees, and fines in order to obtain
architectural approvals, build improvements, and vote in “community elections.” The amended
petition also sought a temporary injunction enjoining the POA and ACC from:
● requiring Myers and Dart Frog to pay assessments, fees, or fines apart from
admission or use fees for community facilities;
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● requiring Myers and Dart Frog to submit anything other than plans,
specifications, and a plat to obtain ACC review and consideration of architectural
submissions; and
● preventing Myers and Dart Frog from voting in community elections on the
ground that they had failed to pay assessments, fees, or fines.
After an evidentiary hearing, the district court denied the request for temporary injunctive relief
and ordered the parties to mediation. Myers and Dart Frog then perfected this interlocutory
appeal. See Tex. Civ. Prac. & Rem. Code § 51.014(a)(4) (person may appeal from interlocutory
order of district court that refuses a temporary injunction).
DISCUSSION
At a hearing on a request for a temporary injunction, the only question before the
trial court is whether the applicant is entitled to preservation of the status quo of the subject
matter of the suit pending a trial on the merits. Davis v. Huey, 571 S.W.2d 859, 861-62 (Tex.
1978); Gettysburg Homeowners Ass’n, Inc. v. Olson, 768 S.W.2d 369, 371 (Tex. App.—Houston
[14th Dist.] 1989, no writ). The decision to grant or deny a temporary injunction lies in the
discretion of the trial court, and the trial court’s ruling is subject to reversal only for a clear abuse
of discretion. Texas Health & Human Servs. Comm’n v. Advocates for Patient Access, Inc.,
399 S.W.3d 615, 629 (Tex. App.—Austin 2013, no pet.). This Court may neither substitute its
judgment for that of the trial court nor consider the merits of the lawsuit. Id. We will reverse the
order if the trial court misapplied the law to established facts or if it concluded that the applicant
failed to demonstrate a probable injury or a probable right to recover and such conclusion is not
reasonably supported by the evidence. Brammer v. KB Home Lone Star, L.P., 114 S.W.3d 101,
106 (Tex. App.—Austin 2003, no pet.).
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In general, temporary injunctive relief is warranted when a movant shows: (1) a
cause of action against the defendant; (2) a probable right to the relief sought; and (3) a probable,
imminent, and irreparable injury in the interim. Butnaru v. Ford Motor Co., 84 S.W.3d 198, 204
(Tex. 2002). When an injunction is sought to enforce a restrictive covenant, however, the movant
is not required to show proof of irreparable injury. See Munson v. Milton, 948 S.W.2d 813,
815 (Tex. App.—San Antonio 1997, pet. denied). Instead, the movant need show only that
the defendant intends to do an act that would breach the restrictive covenant. Id. Thus, to be
entitled to injunctive relief in this case, Myers and Dart Frog had to demonstrate that the POA or
the ACC were engaging in conduct that breached the Tahitian Village restrictive covenants.
Myers and Dart Frog argue that the trial court erred in denying the injunction
because the POA and the ACC were wrongfully charging assessments and refusing to review
their architectural submissions. Myers and Dart Frog claim that these actions were breaches
of the restrictive covenants and that, at the hearing on the temporary injunction, they had
demonstrated a probable right to recover on the breach of covenants claim, entitling them to
injunctive relief to preserve the status quo. Thus, we must determine whether Myers and Dart
Frog established a probable right to recover on their breach of covenants claim, which in turn
requires that they demonstrated to the trial court that the POA and the ACC have no authority to
make any assessments and no authority to require more than building plans, specifications, and a
plat before reviewing and deciding whether to approve architectural submissions.
Authority to make assessments
Myers and Dart Frog assert that the Tahitian Village restrictive covenants prohibit
the POA from making any assessments and that its having done so constitutes a breach of
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those covenants. According to Myers and Dart Frog, the authority for the POA to make any
assessments was revoked when the property owners voted in 1998 to amend the “Agreement of
Covenants, Conditions for Tahitian Village” (the Restrictive Covenants) and, as part of the
amendment, deleted Article II of the previous version, which provided for the “Assessment of
Annual Charge.” This amendment, Myers and Dart Frog maintain, stripped the POA of the
authority to make assessments of any kind. The POA and the ACC counter that the amendment
to the Restrictive Covenants removed the requirement that Tahitian Village property owners pay
an annual charge, but that the amendment did not prohibit the POA from making and collecting
other types of assessments as permitted by the POA bylaws. The POA points to Article IX,
section 9(c) of the POA bylaws, which authorizes the POA to “establish an assessment and its
collection as is necessary to maintain the powers, duties, and authority of the [POA].”
Before the court at the hearing on the temporary injunction were the Tahitian
Village subdivision’s dedicatory instruments, including the Restrictive Covenants, the Certificate
of Formation, and the HOA’s Bylaws. Restrictive covenants are interpreted according to the
rules that govern contract construction. Air Park—Dallas Zoning Comm. v. Crow Billingsley
Airpark, Ltd., 109 S.W.3d 900, 909 (Tex. App.—Dallas 2003, no pet.). In construing the
language of the restrictive covenants, our task is to determine the intent of its framers. See
Wilmoth v. Wilcox, 734 S.W.2d 656, 658 (Tex. 1987). Whether the relevant language is
ambiguous is a question of law. See Pilarcik v. Emmons, 966 S.W.2d 474, 478 (Tex. 1998).
Covenants, like contracts, are unambiguous as a matter of law if they can be given a definite
or certain legal meaning. Grain Dealers Mut. Ins. Co. v. McKee, 943 S.W.2d 455, 458 (Tex.
1997). “No construction, no matter how liberal, can construe a property restriction into existence
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when the covenant is silent as to that limitation.” Tarr v. Timberwood Park Owners’ Ass’n,
556 S.W.3d 274, 285 (Tex. 2018).
As Myers and Dart Frog point out, the Restrictive Covenants, as amended, deleted
a provision that required property owners to pay an annual charge to the POA. The Restrictive
Covenants, however, are silent as to the POA’s power to make other assessments. Consequently,
the Restrictive Covenants do not prohibit all assessments; the amendment simply removed the
provision authorizing the POA to impose an annual charge on the subdivision’s property owners.
The POA’s bylaws, by contrast, expressly address assessments and authorize the
POA to make an assessment “as is necessary to maintain [its] powers, duties, and authority.” An
example of such an assessment is the transfer fee the POA assesses when a property changes
ownership. The bylaws are not subordinate documents to the Restrictive Covenants, nor are they
inconsistent with the terms of the Restrictive Covenants, which do not prohibit the POA from
making assessments. See Tex. Prop. Code § 202.001 (providing that “dedicatory instruments”
include “restrictive covenants, bylaws, or similar instrument governing the administration or
operation of a property owners’ association”). While Myers and Dart Frog may take issue with
a particular assessment made by the POA and may argue that such assessment is improper
or unauthorized, they have not demonstrated that the POA is not permitted to make any
assessments at all.
Based on the documents and evidence submitted to the trial court, it could
reasonably have determined that the amendment to the Restrictive Covenants that removed the
POA’s authority to charge residents an annual fee did not foreclose the POA from making other
assessments as permitted by the Bylaws, such as the “transfer fee” or fines for violations of
subdivision rules and regulations. The court could have determined that, based on the record
7
before it, the amendment’s purpose was limited to eliminating an annual charge or assessment
that each homeowner had been required to pay and was not intended to revoke the POA’s
authority to make individual, case-by-case assessments as necessary to carry out its duties. We
conclude that the trial court did not abuse its discretion in determining that Myers and Dart Frog
failed to demonstrate that they had a probable right to recover on their claim that the POA had no
authority to impose or collect any type of assessment from owners of property in the Tahitian
Village subdivision and that doing so was a breach of the Restrictive Covenants.
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Information required for ACC consideration
We next consider whether Myers and Dart Frog established a probable right
to recover on their claim that the ACC’s requiring anything other than building plans,
specifications, and a plat before reviewing and deciding whether to approve architectural
submissions constituted a breach of the Restrictive Covenants. Myers and Dart Frog assert that
because the Restrictive Covenants contain a covenant requiring that a property owner submit
plans, specifications, and a plat, the POA and the ACC are not authorized to require submission
of any other type of additional documentation before considering and approving architectural
submissions. The Restrictive Covenants, however, do not prohibit the ACC from requiring
additional information and documentation with architectural submissions. In fact, the Restrictive
Covenants impose a duty on the ACC to prevent the use of any lot in a way that would “violate
1
Myers and Dart Frog assert that they are entitled to an injunction preventing the
POA from not permitting them to vote in community elections based on their failure to pay
fines. Myers and Dart Frog maintain that because the POA is not authorized to make any
assessments, failure to pay assessments cannot serve as a basis for denying them the right to
vote. Because Myers and Dart Frog failed to establish that the POA has no authority to make
assessments, the trial court did not abuse its discretion in denying their request for injunctive
relief related to voting.
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the laws of the local, State or Federal governments.” The trial court could have determined,
based on the record before it, that the plans, specifications, and a plat would not provide
sufficient information to the ACC to carry out its duty of ensuring that a proposed project did in
fact comply with local, state, and federal laws. Thus, the trial court did not abuse its discretion
by finding that Myers and Dart Frog were not entitled to injunctive relief prohibiting the POA or
the ACC from requiring information beyond the plans, specifications, and a plat. Myers and
Dart Frog may at trial present evidence that the specific additional information the POA and the
ACC demanded from them was in excess of its authority or otherwise improper, but the issue in
this appeal is whether Myers and Dart Frog established a probable right to recover on their
assertion that requiring the submission of additional information per se constituted a breach of
the Restrictive Covenants. We conclude that the trial court’s denial of the temporary injunctive
relief sought was not an abuse of its discretion.
Outcome: Having concluded that the trial court did not abuse its discretion in denying the
temporary injunctive relief Myers and Dart Frog requested, we affirm the trial court’s order.
Plaintiff's Experts:
Defendant's Experts:
Comments: