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Lanny V. DAO, Appellant v. MISSION BEND HOMEOWNERS ASSOCIATION, INC., Appellee
This appeal concerns a dispute between a property owner and a property owners’ association over the property owner's installation of a fountain in his front yard without the association's approval. After a bench trial, the trial court ordered the property owner—appellant Lanny V. Dao—to remove the fountain, finding that it violated restrictive covenants applicable to his property, and awarded the association—appellee Mission Bend Homeowners Association, Inc. (the “Association”)—its attorney's fees. On appeal, Dao contends the trial court erred because (1) the Association did not conduct a presuit hearing, as required by the Property Code; (2) the deed restrictions do not prohibit the fountain; (3) the evidence was insufficient to support a finding he violated the deed restrictions; (4) the Association exercised its discretionary authority in an arbitrary, capricious, or discriminatory manner; and (5) the Association's attorney's fees were not recoverable.
Because we agree with Dao that the Association's attorney's fees were not recoverable, we modify the trial court's judgment to eliminate the attorney's fee award. We affirm the judgment as modified.
Dao owns a home in the Mission Bend subdivision. In March 2019, the Association sued Dao, seeking to compel the removal of a water fountain he constructed in his front yard as a memorial to his late mother-in-law in accordance with his Buddhist tradition.1 The Association's petition for injunctive relief alleged that the fountain violated two provisions of the Mission Bend Declaration of Covenants, Conditions and Restrictions (the “Restrictions”)—namely, the provisions in Sections 1 and 14 of Article III restricting property use.
Article III, Section 1 (“Land Use and Building Type”) provides:
All Lots shall be known and described as Lots for residential purposes only (hereinafter sometimes referred to as “residential lots”), and no structure shall be erected, altered, placed or permitted to remain on any residential Lot other than one single-family dwelling not to exceed two (2) stories in height and a detached or an attached garage for not less than two or more than four cars․
Article III, Section 14 (“Lot Maintenance”) instructs that the “Owner of each Lot and residence shall maintain the same, and the improvements, grass, trees, hedges, and plantings thereon, in a neat and attractive condition.” The Association, after seven days’ written notice to the owner of any lot, is authorized to take certain actions, including:
(1) to mow the grass thereon, (2) to remove any debris therefrom, (3) to remove, trim or prune any tree, hedge, or planting that, in the opinion of the [Association], by reason of its location or height, or the manner in which it has been permitted to grow, or disease, decay or other condition is detrimental to the enjoyment of the adjoining property, is unattractive in appearance or obstructs the view of traffic, (4) to repair or paint any fence thereon that is out of repair or not in harmony, with respect to color, with fencing on adjacent property in the Subdivision, and (5) to do any and all things necessary or desirable in the opinion of the [Association] to place such property in a neat and attractive condition consistent with the intention of this Declaration.
Dao answered the Association's suit and denied that the fountain was prohibited under the Restrictions or the Architectural Control Committee Compliance Guidelines (the “Guidelines”). Dao pleaded that neither Section 1 nor Section 14 of Article III applied. In addition, Dao asserted that the Association's enforcement action was unfair and discriminatory, and that the Association denied him due process when it refused to conduct a hearing on whether the fountain violated the Restrictions.
The case proceeded to a bench trial. Lesha Leighton, an employee of the Association's property management company, testified that her responsibilities included enforcement of the Restrictions. She interpreted Article IV of the Restrictions, which regards the Association's Architectural Control Committee (the “ACC”) and provides that “[n]o building shall be erected, placed or altered on any Lot until the construction plans and specifications ․ have been approved in writing ․ by [the ACC],” as requiring a property owner to obtain ACC approval before constructing anything visible from the street. The ACC determined that fountains were not permitted structures,2 and any other fountains in the subdivision had been removed. Although the Association initially did not oppose Dao's fountain as a temporary installation to mourn his mother-in-law's passing, Leighton stated the fountain remained in place for too long. Another employee of the property management company wrote Dao:
․ From what I understand you originally told your neighbors that this structure was going to be in place for approximately 45 days to mourn the loss of your mother[-]in[-]law however it is now well past that time frame and it needs to be removed or relocated to your back yard where it's not in public view. Something of this nature should be approved by the [ACC] prior to building and placing it in the front yard.
Leighton opined that, although not expressly referenced, a fountain was an improvement subject to Article III, Section 14's neat-and-attractive-condition requirement. She testified that while “beauty [is] in the eye of the beholder,” people complained that Dao's fountain “was not very pretty.” The Association asked Dao to remove the fountain rather than improve it.
Dao acknowledged that he installed the fountain without ACC approval because he concluded the Restrictions did not prohibit it. When asked whether he reviewed Article IV's requirement that “[n]o building shall be erected, placed or altered on any Lot until the construction plans and specifications ․ have been approved in writing ․ by [the ACC],” Dao answered affirmatively. He opined that the requirement did not apply because the fountain was not a “building.”
Dao further testified that when he received notice from the Association that the fountain violated the Restrictions, he requested a hearing with the Association's board of directors. He stated that he did not receive a response, and no hearing was conducted. On cross-examination, however, Dao acknowledged he received email correspondence noting that he could attend any of the Association's monthly board meetings.
At the end of the trial, the trial court orally announced its ruling. The trial court concluded that while Article III, Section 14 of the Restrictions applied, Section 1 did not. The trial court found that Dao's fountain violated Section 14. In its final judgment, the trial court ordered Dao to remove the fountain and pay the Association $5,193.82 as attorney's fees.
The trial court subsequently issued findings of fact and conclusions of law. While the trial court restated its oral rulings, the trial court made additional findings and conclusions, including:
• [Dao] erected or placed a fountain on [his] property without obtaining any prior approval for same from [the Association] or [the ACC] in violation of the provisions of the Restrictions and Guidelines.
• The fountain ․ constituted a “structure,” “building,” “improvement,” “statute” [sic] and “sculpture” as those terms are defined in the Restrictions and Guidelines.
• [The Association] complied with all notice requirements regarding [Dao's] alleged violations of the Restrictions and Guidelines.
• [The Association] complied with all conditions precedent to seeking injunctive relief against [Dao] concerning the fountain ․ [Dao] waived [his] right to [a] hearing before [the] Board. Even without waiver, [Dao] had [the] opportunity to be heard.
• The erection or placement of the fountain on [Dao's] property constituted a distinct, substantial and material breach of the restrictive covenants applicable to [Dao's] property, including the Restrictions and Guidelines.
• [Dao's] breach of the Restrictions and Guidelines entitles [the Association] to injunctive relief, namely the removal of the fountain from [Dao's] property.
• [The Association] did not act in an arbitrary, capricious or discriminatory manner toward [Dao] concerning the enforcement of the Restrictions and Guidelines ․
• [The Association] did not waive its rights or authority to enforce any provisions of the Restrictions or Guidelines against [Dao] or [Dao's] property.
In addition, the trial court concluded that Dao violated not only Article III, but also Article IV of the Restrictions and Sections 1 and 4 of the Guidelines by placing the fountain in his front yard without obtaining ACC approval.3
In his first issue, Dao contends the Association's failure to provide him a hearing before its board, as required by Property Code Section 209.007, deprived the trial court of subject-matter jurisdiction over the suit. Alternatively, Dao argues that if Section 209.007’s hearing requirement is not jurisdictional, the trial court erred in rendering judgment for the Association because he did not waive his right to the hearing.
A. Section 209.007 hearing
We begin with an overview of the relevant statutory provisions. Chapter 209 of the Property Code governs the relationship between property owners’ associations and property owners. See generally Tex. Prop. Code §§ 209.001–.017 (Texas Residential Property Owners Protection Act).4 Relevant here, Section 209.006 provides that before filing certain suits against an owner, a property owners’ association “must give written notice to the owner.” Id. § 209.006(a) (applying in suits “against an owner other than a suit to collect a regular or special assessment or foreclose under an association's lien”). Among other things, the notice must:
(1) describe the violation or property damage that is the basis for the suspension action, charge, or fine and state any amount due the association from the owner;
(2) ․ inform the owner that the owner:
(A) is entitled to a reasonable period to cure the violation and avoid the fine or suspension if the violation is of a curable nature and does not pose a threat to public health or safety;
(B) may request a hearing under Section 209.007 on or before the 30th day after the date the notice was mailed to the owner; and
(3) specify the date by which the owner must cure the violation if the violation is of a curable nature and does not pose a threat to public health or safety[.]
Id. § 209.006(b).
Section 209.007 establishes the parameters of the owner's right to a hearing: “If the owner is entitled to an opportunity to cure the violation, the owner has the right to submit a written request for a hearing to discuss and verify facts and resolve the matter in issue before ․ the board.”5 Id. § 209.007(a). “[N]ot later than the 30th day after the date the board receives the owner's request for a hearing,” the property owners’ association “shall hold a hearing ․ and shall notify the owner of the date, time, and place of the hearing not later than the 10th day before the date of the hearing.” Id. § 209.007(c). However, “[t]he board or the owner may request a postponement, and, if requested, a postponement shall be granted for a period of not more than 10 days.” Id. By the parties’ agreement, additional postponements may be granted. Id.
Section 209.008 provides that an association may collect attorney's fees and costs related to collecting amounts (including damages) due the association for enforcing restrictions or the association's bylaws or rules, but only if the owner is provided written notice that attorney's fees and costs will be charged to the owner if the violation or delinquency continues after a date certain. Id. § 209.008(a). However, “[a]n owner is not liable for attorney's fees incurred by the association relating to a matter described by the notice under Section 209.006 if the attorney's fees are incurred before the conclusion of the hearing under Section 209.007 or, if the owner does not request a hearing under that section, before the date by which the owner must request a hearing.” Id. § 209.008(b). “The owner's presence is not required to hold a hearing under Section 209.007.” Id.
Whether Section 209.007’s hearing requirement is jurisdictional, meaning an association's failure to comply deprives the trial court of subject-matter jurisdiction over the suit, is an issue of first impression. Although other courts have concluded Section 209.006's related, presuit notice requirement is not jurisdictional, none has considered Section 209.007’s hearing requirement. See Park v. Escalera Ranch Owners’ Ass'n, 457 S.W.3d 571, 590 (Tex. App.—Austin 2015, no pet.) (concluding notice under Section 209.006 was mandatory, but not jurisdictional); see also Roddy v. Holly Lake Ranch Ass'n, 589 S.W.3d 336, 345 (Tex. App.—Tyler 2019, no pet.) (following Park); Silverman v. Clairemont H.A., Inc., No. 02-18-00380-CV, 2019 WL 4048874, at *3 n.3 (Tex. App.—Fort Worth Aug. 28, 2019, pet. denied) (mem. op.) (citing Park and stating “[n]o reading of [Chapter 209] indicates that its notice requirements are jurisdictional”).
Statutory-interpretation principles guide our analysis of whether a hearing under Section 209.007 is jurisdictional. Crosstex Energy Servs., L.P. v. Pro Plus, Inc., 430 S.W.3d 384, 392 (Tex. 2014). We start with a presumption that the Legislature did not intend to make compliance with Section 209.007 jurisdictional. See City of DeSoto v. White, 288 S.W.3d 389, 394 (Tex. 2009); see also Dubai Petroleum Co. v. Kazi, 12 S.W.3d 71, 76 (Tex. 2000) (noting modern trend toward reducing vulnerability of final judgments to attack based on lack of subject-matter jurisdiction). Only clear legislative intent to the contrary can overcome this presumption. City of DeSoto, 288 S.W.3d at 394. We consider: “(1) the plain meaning of the statute; (2) ‘the presence or absence of specific consequences for noncompliance’; (3) the purpose of the statute; and (4) ‘the consequences that result from each possible interpretation.’ ” Crosstex Energy Servs., 430 S.W.3d at 392 (quoting City of DeSoto, 288 S.W.3d at 395, and Helena Chem. Co. v. Wilkins, 47 S.W.3d 486, 495 (Tex. 2001)). Our review is de novo. See City of DeSoto, 288 S.W.3d at 394.
Turning to the statutory text, Section 209.007(a) establishes an owner's right to request a hearing before the association's board, but the right is not unqualified. See Tex. Prop. Code § 297.007(a). Subsection (a)’s plain language states:
If the owner is entitled to an opportunity to cure the violation, the owner has the right to submit a written request for a hearing to discuss and verify facts and resolve the matter in issue before ․ the board[.]
Id. (emphasis added). The word “if” at the beginning of the clause signals the provision's application is conditional. See, e.g., if definition, Merriam-Webster.com, http://www.merriam-webster.com/dictionary/if (last visited July 25, 2022) (“if” means “in the event that”; “allowing that”; “on the assumption that”; or “on condition that”); cf. Solar Applications Eng'g, Inc. v. T.A. Operating Corp., 327 S.W.3d 104, 109 (Tex. 2010) (describing term such as “if” as “conditional language” in context of contract construction). In addition, subsection (d) provides in part: “The notice and hearing provisions of Section 209.006 and this section do not apply if the association files a suit seeking a temporary restraining order or temporary injunctive relief or files a suit that includes foreclosure as a cause of action.” Tex. Prop. Code § 209.007(d). Thus, the statute creates a framework in which an owner may or may not be entitled to request a hearing, depending on whether the owner's alleged violation is curable and the type of relief requested by the association. See id. §§ 209.006(d), (g)–(h), .007(a), (d). In addition, the owner may or may not actually request the hearing. See id. § 209.007(a).
When there is both an entitlement to and a request for a hearing, however, the statute provides that the association “shall” take two actions: it “shall” (1) hold a hearing within 30 days of its receipt of the owner's request and (2) notify the owner of the date, time, and place of the hearing not later than ten days before the date of the hearing. See id. § 297.007(c). The Code Construction Act explains that “ ‘[s]hall’ imposes a duty,” Tex. Gov't Code § 311.016(2), and the Texas Supreme Court has stated that “shall” generally has a mandatory connotation, unless legislative intent suggests otherwise, see Albertson's, Inc. v. Sinclair, 984 S.W.2d 958, 961 (Tex. 1999). In addition, courts generally “construe a statutory provision as mandatory when the power or duty to which it relates is for the public good.” Albertson's, 984 S.W.2d at 961.
In considering Section 209.006's related, presuit-notice requirement, the Austin court observed that the requirement's purpose is to discourage litigation and encourage settlements. See Park, 457 S.W.3d at 588 (concluding Section 209.006(a)’s purpose “is similar to presuit-notice provisions found in other statutes: to discourage litigation and encourage settlements” (quotation omitted)). We conclude the same is true with respect to Section 209.007’s hearing requirement. That is, the obvious purpose of Section 209.007—entitled “Hearing Before Board; Alternative Dispute Resolution”—is to provide property owners the opportunity to resolve disputes with associations outside of litigation. See Tex. Prop. Code § 209.007. That purpose is not well served if Section 209.007 is construed to mean only that a hearing should be—but is not required to be—held. Given these considerations, we conclude that Section 209.007’s hearing requirement is mandatory in some, but not all, cases—namely, a hearing is mandatory when the subsection (d) exception for suits seeking a temporary restraining order, temporary injunction, or foreclosure does not apply; the owner is entitled to an opportunity to cure the violation; and the owner submits a written request for a hearing. See Tex. Prop. Code § 209.007(a), (c).
However, it does not necessarily follow that if an association is required by statute to have a hearing and does not do so, it cannot seek relief in the trial courts at all. See Albertson's, 984 S.W.2d at 961 (“[J]ust because a statutory requirement is mandatory does not mean that compliance with it is jurisdictional.”). Here, the statute's plain language making a hearing mandatory only in some cases weighs against a jurisdictional interpretation.
In addition, nothing in the plain language of Chapter 209 indicates that the Legislature intended the hearing requirement to be jurisdictional. See Crosstex Energy Servs., 430 S.W.3d at 392 (providing example of unequivocal language in Labor Code making certain filing deadlines jurisdictional and explaining that even mandatory dismissal language does not necessarily compel conclusion that statute is jurisdictional). If the Legislature intended dismissal to be a consequence of an association's failure to hold a hearing, it could have said so. See, e.g., Entergy Gulf States, Inc. v. Summers, 282 S.W.3d 433, 443 (Tex. 2009) (noting courts must enforce statutes as written and refrain from rewriting text that lawmakers chose). But it did not. The absence of a provision in Chapter 209 dictating dismissal for noncompliance with the hearing requirement is also a circumstance weighing against a jurisdictional interpretation. See Helena Chem. Co., 47 S.W.3d at 495; see also Albertson's, 984 S.W.2d at 962 (explaining lack of consequence for noncompliance “is significant when considering the entire statute”).
“When a statute is silent about the consequences of noncompliance, we look to the statute's purpose to determine the proper consequences.” Helena Chem. Co., 47 S.W.3d at 494. “Chapter 209's title—the Texas Residential Property Owners Protection Act—reflects a general concern by the Legislature to protect the rights of property owners vis-à-vis property owners’ associations[.]” Park, 457 S.W.3d at 589. But this objective, in itself, does not imply the Legislature intended to deprive Texas trial courts of subject-matter jurisdiction when associations fail to provide a hearing under circumstances in which one is required. See id.
The final factor to be considered—the consequences of the alternative interpretations—also weighs against a jurisdictional interpretation of Section 209.007’s hearing requirement. Under Dao's interpretation, an association's failure to provide a hearing, before suit, to an owner who both is entitled to and requests one would preclude any consideration of the association's claims by a trial court. In addition, any judgments in cases that were rendered in the absence of a hearing would be indefinitely subject to collateral attack. See City of DeSoto, 288 S.W.3d at 394 (noting it is preferable to “avoid a result that leaves the decisions and judgments of [a trial court] in limbo and subject to future attack, unless that was the Legislature's clear intent”).
Dao argues that a nonjurisdictional interpretation of Section 209.007 will allow associations to deprive property owners of their right to a hearing and the opportunity to avoid the expense of litigation with impunity. We disagree. Although dismissal may not be required, there may be other consequences for noncompliance. For example, Chapter 209 limits an association's attorney's fees if it denies, or even delays, a hearing required by Section 209.007. See Tex. Prop. Code § 209.008(b) (“An owner is not liable for attorney's fees incurred by the association relating to a matter described by the notice under Section 209.006 if the attorney's fees are incurred before the conclusion of the hearing under Section 209.007 or, if the owner does not request a hearing under that section, before the date by which the owner must request a hearing.”). Thus, if an association fails to comply with Section 209.007 by depriving the owner of a required hearing, it risks forfeiting all or a substantial portion of its attorney's fees. See id.
Having considered all the factors, we conclude the Legislature did not intend to make a hearing under Section 209.007 jurisdictional. See City of DeSoto, 288 S.W.3d at 394; see also Dubai Petroleum Co., 12 S.W.3d at 76.
B. Waiver of right to hearing
The trial court found that Dao waived his right to a hearing before the Association's board and, even if there was no waiver, Dao had an opportunity to be heard. Dao contends that Section 209.007’s hearing requirement is nonwaivable, and he argues that the trial court erred by finding waiver because he objected to the Association's failure to provide a hearing in his answer.
We reject Dao's invitation to adopt an interpretation of Section 209.007 that renders it a nonwaivable requirement. Here, the plain language of the statute itself contemplates waiver of the hearing requirement when the owner does not make a written request for a hearing. See Tex. Prop. Code §§ 209.007(a) (giving owner “the right to submit a written request for a hearing”), (c) (requiring association to hold hearing “not later than the 30th day after the date the board receives the owner's request for a hearing”).
We have also rejected Dao's contention that noncompliance with Section 209.007 requires dismissal of a property owners’ association's action because the statute, while mandatory in some cases, is not jurisdictional. Although parties may not waive jurisdictional statutory duties, they may waive mandatory, nonjurisdictional requirements by failing to object in a timely fashion. See Crosstex Energy Servs., 430 S.W.3d at 391. Courts have observed that, in some contexts, noncompliance with a mandatory, nonjurisdictional requirement may be cured by a party's timely request for an abatement to allow compliance. See, e.g., Hines v. Hash, 843 S.W.2d 464, 469 (Tex. 1992); see also Park, 457 S.W.3d at 589–90. For instance, in Hines, the Texas Supreme Court determined that abatement of a consumer action for compliance with the DTPA's statutory notice period was more consistent with the purpose of notice—“to discourage litigation and encourage settlements of consumer complaints”—than dismissal. See Hines, 843 S.W.2d at 468–69. The Hines court observed: “[T]he consequence of noncompliance is not necessarily punishment. It may be limited, as we think it is here, to enforcement of the purpose of the notice.” Id. at 469.
Relying on Hines, the Austin court in Park observed that, “[i]n most cases, timely abatement for the statutory notice period will allow the parties an adequate opportunity to explore settlement and avoid litigation expenses.” 457 S.W.3d at 589–90. Consequently, the court held that a property owner waived notice under Section 209.006 by failing to request abatement. Id. at 590.
Here, although Dao's complaint concerns a lack of hearing and not a lack of notice, the reasoning is the same. As we have already stated, Chapter 209 is silent about the consequences of noncompliance with Section 209.007’s hearing requirement. See Tex. Prop. Code §§ 209.001–.017. “When a statute is silent about the consequences of noncompliance, we look to the statute's purpose to determine the proper consequences.” Helena Chem. Co., 47 S.W.3d at 494. Like Section 209.006's notice provision, the purpose of Section 209.007’s hearing requirement is to afford the opportunity for alternative dispute resolution. See Tex. Prop. Code § 209.007 (entitled “Hearing Before Board; Alternative Dispute Resolution”); see also Park, 457 S.W.3d at 588. Thus, as in Hines and Park, the consequence of noncompliance is limited to enforcement of the purpose of the rule, which may be achieved through an abatement of the litigation to afford the property owner a hearing. See Hines, 843 S.W.2d at 468–69; Park, 457 S.W.3d at 589–90. “While the action is abated, the parties may discuss their positions as they would have done during [a presuit hearing].” Hines, 843 S.W.2d at 469.
The appellate record does not contain any written or oral request by Dao for an abatement of the trial proceedings to allow for a Section 209.007 hearing. Dao contends that he did not waive his right to a hearing because he objected to the lack of a hearing in his answer. Dao pleaded:
10. ․ [The Association] did not follow the rule of the Deed Restrictions by not responding to [his] request for a hearing and thus effectively denying [him] due process. [Dao] would show the Court the following:
11. [The Association] sent a certified letter to [Dao] on September 12, 2018, asking [Dao] to remove the water fountain from public view. The certified letter offered [Dao] a choice to submit a written request for a hearing on or before the 30th day after the date of this notice. [Dao] responded on October 10, 2018 to request a hearing date but [Dao] never received a response.
12. [Dao] requests the Court to declare that [the Association] violated a community rule and requests that the Court find that [the Association] has waived its right to enforce this alleged violation because [the Association] did not give [Dao] the opportunity to have the hearing.
While Dao's pleading requests a finding that the Association waived its right to seek enforcement of the Restrictions against Dao by failing to provide him a hearing, it does not request an abatement of the proceeding so that the hearing could be conducted. Because Dao did not request an abatement to allow for the hearing required by Section 209.007, we hold he waived his right to such hearing. Cf. Hines, 843 S.W.2d at 469; Park, 457 S.W.3d at 590. Moreover, even if a request for an abatement was not required, Dao does not challenge the trial court's finding that he had an opportunity to be heard. See, e.g., Britton v. Tex. Dep't of Criminal Justice, 95 S.W.3d 676, 681–82 (Tex. App.—Houston [1st Dist.] 2002, no pet.) (noting appellant must attack all independent grounds supporting judgment in order to obtain reversal).
Accordingly, we overrule Dao's first issue.
In his second through fourth issues, Dao argues the trial court erred by granting the Association's request for a permanent injunction compelling the removal of his fountain because the Association failed to present sufficient evidence of a violation of the Restrictions or the elements of injunctive relief. We address these issues in turn.
A. Standards of Review
To obtain injunctive relief, a party must generally show: (1) the existence of a wrongful act; (2) the existence of imminent harm; (3) the existence of irreparable injury; and (4) the absence of an adequate remedy at law. Jim Rutherford Invs., Inc. v. Terramar Beach Cmty. Ass'n, 25 S.W.3d 845, 849 (Tex. App.—Houston [14th Dist.] 2000, pet. denied). For restrictive-covenant cases, however, there is a well-settled exception to the general rule: when a substantial breach of the covenant is shown, it is not necessary to show the existence of any particular amount of damages or to show that the injury will be irreparable. See Park, 457 S.W.3d at 600.
We review the grant of a permanent injunction for abuse of discretion. Operation Rescue-Nat'l v. Planned Parenthood of Hous. Se. Tex., Inc., 975 S.W.2d 546, 560 (Tex. 1998); Glattly v. Air Starter Components, Inc., 332 S.W.3d 620, 642 (Tex. App.—Houston [1st Dist.] 2010, pet. denied). A trial court abuses its discretion when its decision is arbitrary, unreasonable, or without reference to any guiding rules or principles. Downer v. Aquamarine Operators, Inc., 701 S.W.2d 238, 241–42 (Tex. 1985). Because the trial court has no discretion in determining the applicable law, the trial court also abuses its discretion when it fails to analyze the law correctly and apply it to the facts of the case. In re Kuntz, 124 S.W.3d 179, 181 (Tex. 2003). Under an abuse of discretion standard, the legal and factual sufficiency of the evidence are not independent grounds for reversal, but the sufficiency of the evidence is a relevant factor in determining whether the trial court had sufficient evidence to exercise its discretion. Beaumont Bank, N.A. v. Buller, 806 S.W.2d 223, 226 (Tex. 1991).
The standard of review for legal and factual sufficiency challenges is the same whether a judge or jury served as the factfinder. See Ifiesimama v. Haile, 522 S.W.3d 675, 683 (Tex. App.—Houston [1st Dist.] 2017, pet. denied). In a legal sufficiency review, we consider the evidence in a light most favorable to the challenged finding, crediting favorable evidence if a reasonable factfinder could, and disregarding contrary evidence unless a reasonable factfinder could not. City of Keller v. Wilson, 168 S.W.3d 802, 827 (Tex. 2005); Eagle Oil & Gas Co. v. Shale Exploration, LLC, 549 S.W.3d 256, 269 (Tex. App.—Houston [1st Dist.] 2018, pet. dism'd). If there is more than a scintilla of evidence to support the finding, the evidence is legally sufficient. Formosa Plastics Corp. USA v. Presidio Eng'rs & Contractors, Inc., 960 S.W.2d 41, 48 (Tex. 1998). “When the evidence offered to prove a vital fact is so weak as to do no more than create a mere surmise or suspicion of its existence, the evidence is no more than a scintilla and, in legal effect, is no evidence.” Kindred v. Con/Chem, Inc., 650 S.W.2d 61, 63 (Tex. 1983). If the evidence furnishes a reasonable basis for differing conclusions by reasonable minds as to the existence of a vital fact, then there is legally sufficient evidence, more than a scintilla, to support the fact. Id.
When reviewing the factual sufficiency of the evidence, we examine all the evidence and set aside a finding only if it is so contrary to the evidence as to be clearly wrong and unjust. Maritime Overseas Corp. v. Ellis, 971 S.W.2d 402, 407 (Tex. 1998); Cameron v. Cameron, 158 S.W.3d 680, 683 (Tex. App.—Dallas 2005, pet. denied). In conducting our review of both the legal and factual sufficiency of the evidence, we are mindful that the factfinder was the sole judge of the credibility of the witnesses and the weight to be given their testimony. City of Keller, 168 S.W.3d at 819; Hinkle v. Hinkle, 223 S.W.3d 773, 782 (Tex. App.—Dallas 2007, no pet.). We may not substitute our judgment for the factfinder's, even if we would reach a different answer on the evidence. See Maritime Overseas Corp., 971 S.W.2d at 407; Hinkle, 223 S.W.3d at 782.
B. Dao's violation of the Restrictions
In his second issue, Dao argues that the trial court abused its discretion by granting a permanent injunction compelling the removal of his fountain because the applicable restrictive covenant—Article III, Section 14 of the Restriction—cannot be construed to prohibit the fountain. And in a portion of his third issue,6 Dao contends that, “[r]egardless of how the Court construes Article III, Section 14,” the evidence was not legally and factually sufficient to find a violation of that provision.
Although Dao acknowledges that the trial court found violations of additional provisions of the Restrictions—specifically, Article III, Section 1 and Article IV—Dao argues the injunction cannot be sustained on those findings. Unlike his challenge to the trial court's Article III, Section 14 finding, Dao does not contend in his appellant's brief that the trial court misconstrued Article III, Section 1 or Article IV or that the evidence was insufficient to show he violated these provisions.7 Instead, he argues a violation of these provisions cannot sustain the trial court's judgment because the Association either failed to give the Section 209.006 notice of their violation or failed to plead a violation of these provisions in its petition for injunctive relief. According to Dao, the trial court's reliance on any ground other than Article III, Section 14 was error. We disagree.
The Association's petition requesting injunctive relief expressly alleged a violation of Article III, Section 1 of the Restrictions. And even if, as Dao contends, the Association's notice of Dao's violations only referenced Article III, Section 14 (and not also Article III, Section 1), Dao waived his right to notice of the alleged Section 1 violation by failing to request an abatement of the lawsuit under Property Code Section 209.006. See Park, 457 S.W.3d at 590 (concluding property owner waived notice under Section 209.006 by failing to request abatement); see also Tex. Prop. Code § 209.006(b) (requiring notice to describe violation). Thus, the trial court's finding that Dao violated Article III, Section 1 is neither outside the scope of the Association's pleading nor precluded by a lack of notice, and we cannot hold the trial court abused its discretion by finding unpleaded or unnoticed violations of the Restrictions.
Further, because Dao does not challenge either the trial court's construction of Article III, Section 1 or the sufficiency of the evidence to support its violation in his opening brief, we need not address the portion of his third issue challenging the sufficiency of the evidence of the Article III, Section 14 violation. See Tex. R. App. P. 47.1. “[A]n appellant must attack all independent bases or grounds that fully support a complained-of ruling or judgment,” and when he does not, as here, we must affirm the ruling or judgment. Britton, 95 S.W.3d at 681.
Accordingly, we overrule Dao's second issue and the portion of his third issue challenging the sufficiency of the evidence of a violation of Article III, Section 14.
C. Imminent harm
As noted, Dao's third issue also includes a complaint that the Association failed to present evidence of the existence of imminent harm, which is an element of the injunctive relief awarded by the trial court. See Jim Rutherford Invs., 25 S.W.3d at 849. Dao asserts that the Association could not prevail on its request for a permanent injunction compelling the removal of his fountain absent evidence that his fountain “caused or will cause” subdivision property values to decline. Dao has not cited any authority to support his contention that such a showing of declining property value was required to establish the existence of imminent harm. See Tex. R. App. P. 38.1(i) (“The brief must contain a clear and concise argument for the contentions made, with appropriate citations to authorities and to the record.”). The trial court could reasonably find imminent harm based on the Association's evidence that Dao's refusal to remove his fountain constituted an ongoing violation of the Restrictions, and that neighbors had complained to the Association's property management company about the fountain. See, e.g., Hoyt v. Geist, 364 S.W.2d 461, 464 (Tex. Civ. App.—Houston 1963, no writ) (considering whether evidence showed damage, annoyance, or inconvenience to neighboring property owners). Consequently, we hold the trial court did not abuse its discretion by finding imminent harm.
Accordingly, we overrule the portion of Dao's third issue challenging the existence of imminent harm.
D. Association's exercise of discretionary authority
In his fourth issue, Dao contends the trial court abused its discretion by granting a permanent injunction because the evidence was legally and factually insufficient to support the trial court's finding that the Association did not exercise its authority to enforce the Restrictions in an arbitrary, capricious, or discriminatory manner. We disagree.
Section 202.004 of the Property Code creates a presumption that a property owners’ association exercises its discretionary authority concerning a restrictive covenant reasonably “unless the court determines by a preponderance of the evidence that the exercise of discretionary authority was arbitrary, capricious, or discriminatory.” Tex. Prop. Code § 202.004(a). This statutory presumption of reasonableness is not evidence but rather a rule of procedure which Dao had the burden to overcome by introducing positive evidence to the contrary. See Glenwood Acres Landowners Ass'n, Inc. v. Alvis, No. 12-07-00072-CV, 2007 WL 2178554, at *2 (Tex. App.—Tyler July 31, 2007, no pet.) (mem. op.); Green v. Ransor, Inc., 175 S.W.3d 513, 516 (Tex. App.—Fort Worth 2005, no pet.). When positive evidence to the contrary is introduced, the presumption “disappears.” Glenwood Acres Landowners Ass'n, 2007 WL 2178554, at *2 (quoting Republic Nat'l Life Ins. Co. v. Heyward, 536 S.W.2d 549, 558 (Tex. 1976)).
In support of his contention that the Association did not act reasonably and instead acted in an arbitrary, capricious, or discriminatory manner, Dao cites two decisions from our sister courts of appeals: Nolan v. Hunter, No. 04-13-00072-CV, 2013 WL 5431050, at *4 (Tex. App.—San Antonio Sept. 25, 2013, no pet.) (mem. op.), and Glenwood Acres Landowners Association, 2007 WL 2178554, at *2. Nolan involved a dispute between neighbors over a fence. See 2013 WL 5431050, at *1. After the Hunters built a fence on their lot, two neighbors claimed the fence violated the subdivision's restrictive covenants, which required fences to be approved by an architectural control committee and to be located a certain distance from the roadway. Id. The Hunters filed suit, seeking, among other things, a declaration that the set-back restriction was waived because the architectural control committee allowed other property owners to have fences that violated the restriction. Id. The Hunters prevailed in a jury trial; among other things, the jury found that the architectural control committee's response to the Hunter's plan was arbitrary, capricious, or discriminatory. Id. at *2.
On appeal, the neighbors argued the evidence was legally and factually insufficient to establish that the architectural control committee acted in an arbitrary, capricious, or discriminatory manner. Id. at *4. The court of appeals concluded there was “ample evidence” to support the jury's finding. Id. The evidence showed that the committee consisted of three members, two of whom were the neighbors complaining about the Hunters’ fence. Id. Although they represented that the decision to reject the Hunters’ plan was a committee decision, the third committee member's testimony established that she was left out of the decision-making process. Id. In addition, the evidence showed that other fences in the neighborhood were of similar height and character. Id. The court of appeals concluded the evidence was therefore legally and factually sufficient to support the jury's finding that the committee's response to the Hunters’ plan was arbitrary, capricious, or discriminatory. Id.
In Glenwood Acres, the trial court denied the property owners’ association a temporary injunction compelling a property owner to remove a mobile home from the subdivision. See 2007 WL 2178554, at *1. On appeal, the association complained that the trial court failed to apply the Section 202.004 presumption of reasonableness. Id. at *2. The court of appeals disagreed, noting that the property owner put on evidence that “there had been a number of mobile homes placed upon lots in Glenwood Acres without the approval of the board.” Id. Further, “there was unrebutted testimony that, even after [a] new board came into office ․ it had allowed mobile homes to be placed upon lots in Glenwood Acres without any approval or authorization.” Id. Thus, the property owner had presented evidence to rebut the presumption the association relied on. Id.
Here, the evidence presented by Dao falls well short of the evidence the Nolan and Glenwood Acres courts found sufficient to show arbitrary, capricious, or discriminatory action on the part of the property owners’ associations. As evidence, Dao relies exclusively on the Association's response to the following request for admission, which the trial court admitted into the evidence at trial:
REQUEST FOR ADMISSION NO. 18
Admit that there are fountains in the [Association] in yards that are visible from the street located at the following addresses: 6403 Las Brisas, 6710 La Granada, 15307 Bonita Springs, all in 77083.
ADMITTED IN PART, DENIED IN PART; 6403 Las Brisas is not in [the Association], 6710 La Granada yes, 15307 Bonita Springs is a bird bath, not a fountain.
Although the Association's admission establishes there was another fountain in the Mission Bend subdivision at the time the Association responded to the pretrial discovery, it does not provide any information as to whether the fountain was comparable to Dao's fountain, was approved by the ACC or the Association's board, or was the subject of any enforcement action by the Association to compel its removal. Without such information, the trial court reasonably could find that Dao had not shown the Association acted arbitrarily, capriciously, or in a discriminatory manner by seeking the removal of his fountain. In addition, Leighton testified at trial that all fountains had been removed from the subdivision,8 and Dao did not challenge her testimony on cross-examination.
Likewise, the Association's admission that a birdbath was present at another home in the subdivision is not evidence that its actions with respect to Dao's fountain were arbitrary, capricious, or discriminatory. Leighton testified that birdbaths were permitted with ACC approval and were not considered fountains. Dao did not present any evidence that his fountain was comparable to the approved birdbath such that allowing the birdbath while disallowing his fountain was arbitrary, capricious, or discriminatory.
In short, we cannot say that the evidence conclusively established that the Association acted arbitrarily, capriciously, or in a discriminatory manner by seeking the removal of Dao's fountain. See Dow Chem. Co. v. Francis, 46 S.W.3d 237, 241 (Tex. 2001) (party making legal sufficiency challenge to finding on which it had burden of proof must establish all vital facts in support of issue as a matter of law). Nor can we say that the trial court's finding that the Association did not act arbitrarily, capriciously, or in a discriminatory manner was contrary to the great weight and preponderance of the evidence. See id. at 242 (party making factual sufficiency challenge to finding on which it had burden of proof must establish adverse finding is against great weight and preponderance of evidence). Accordingly, there was sufficient evidence from which the trial court reasonably could conclude that the Association did not act arbitrarily, capriciously, or in a discriminatory manner, and thus the trial court did not abuse its discretion by granting the temporary injunction. See id. at 241–42.
Accordingly, we overrule Dao's fourth issue.
In his fifth issue, Dao contends that the trial court erred by awarding attorney's fees. See Tex. Prop. Code § 209.008. Dao argues that because the Property Code provides that a property owner is not liable for attorney's fees incurred before the conclusion of a Section 209.007 hearing, the Association forfeited its attorney's fees by failing to conduct a hearing.
The Association sought attorney's fees under Section 5.006 of the Property Code, which provides that “[i]n an action based on breach of a restrictive covenant pertaining to real property, the court shall allow to a prevailing party who asserted the action reasonable attorney's fees in addition the party's costs and claim.” See Tex. Prop. Code § 5.006(a). However, neither party disputes that Section 209.008 limits a property owner's liability for attorney's fees incurred by an association in an action, like this one, to enforce restrictive covenants. See id. § 209.008; see also Haas v. Ashford Hollow Cmty. Improvement Ass'n, Inc., 209 S.W.3d 875, 884–86 (Tex. App.—Houston [14th Dist.] 2006, no pet.) (concluding Section 209.008 applies when association seeks to recover reasonable attorney's fees incurred for enforcing restrictions, bylaws, or rules of association). Section 209.008 provides:
(a) A property owners’ association may collect reimbursement of reasonable attorney's fees and other reasonable costs incurred by the association relating to collecting amounts, including damages, due the association for enforcing restrictions or the bylaws or rules of the association only if the owner is provided a written notice that attorney's fees and costs will be charged to the owner if the delinquency or violation continues after a date certain.
(b) An owner is not liable for attorney's fees incurred by the association relating to a matter described by the notice under Section 209.006 if the attorney's fees are incurred before the conclusion of the hearing under Section 209.007 or, if the owner does not request a hearing under that section, before the date by which the owner must request a hearing. The owner's presence is not required to hold a hearing under Section 209.007.
Tex. Prop. Code § 209.008.
Dao's argument on appeal primarily concerns the application of subsection (b)’s limitation on a property owner's liability for reimbursement of attorney's fees. See id. § 209.008(b). The Association's first notice to Dao specifically identifying the fountain as a violation of the Restrictions was dated September 12, 2018. The notice informed Dao of his right to a hearing on the alleged violation, and Dao requested a hearing within the 30 days provided by Section 209.006. See id. § 209.006(b)(2)(B) (requiring notice to inform owner that owner “may request a hearing under Section 209.007 on or before the 30th day after the date the notice was mailed to the owner”). The Association did not dispute its receipt of Dao's timely request for a hearing nor that it sought reimbursement of the attorney's fees it incurred related to the violation described in the September 12, 2018 notice. But the Association did not hold or conclude a hearing.
Under these circumstances, the plain language of subsection (b) limits Dao's liability for the Association's attorney's fees to those incurred after the conclusion of the requested hearing. See id. § 209.008(b) (“An owner is not liable for attorney's fees incurred by the association relating to a matter described by the notice under Section 209.006 if the attorney's fees are incurred before the conclusion of the hearing under Section 209.007 ․”). Because the Association did not conduct a hearing on Dao's fountain, all the attorney's fees for which it sought reimbursement were incurred “before the conclusion” of a Section 209.007 hearing, meaning none are recoverable. See id.
Although we have concluded that Dao waived his right to notice and a hearing by failing to request an abatement of the Association's suit, we are not persuaded by the Association's argument that Dao's waiver is dispositive of the recoverability of its attorney's fees. The statutory limit on an owner's fee liability in subsection (b) is not qualified by any factor other than whether a hearing is requested: If a hearing is not requested, the association's recoverable attorney's fees do not include those incurred before the date by which the owner was required to request the hearing, otherwise the association's recoverable attorney's fees do not include those incurred “before the conclusion of the hearing under Section 209.007.” See id.
Neither are we persuaded by the Association's argument that Dao waived his challenge to the recoverability of its attorney's fees by voluntarily paying a $225 fee invoice. In support, the Association cites Sun Exploration & Production Co. v. Benton, a Texas Supreme Court decision addressing waiver of conditions precedent. See 728 S.W.2d 35, 37 (Tex. 1987) (noting conditions precedent may be waived and that waiver may be inferred from a party's conduct). But we do not read subsection (b) to state a condition precedent; rather, it establishes a limitation on liability. Though “magic words” are not required, conditions precedent generally are signaled by conditional language such as “if,” “provided that,” or “on the condition that.” See Criswell v. European Crossroads Shopping Ctr., Ltd., 792 S.W.2d 945, 948 (Tex. 1990). Subsection (a) includes such conditional language in its directive that an association “may collect reimbursement of reasonable attorney's fees ․ only if the owner is provided a written notice that attorney's fees and costs will be charged.” See Tex. Prop. Code § 209.008(a). But subsection (b) does not. See id. § 209.008(b); see also Entergy Gulf States, 282 S.W.3d at 443 (noting courts must enforce statutes as written and refrain from rewriting text that lawmakers chose); In re Ament, 890 S.W.2d 39, 41 (Tex. 1994) (courts must presume legislature's omissions in statutory enactments are intentional). Thus, the Association's cited authority on waiver is inapposite.
Having concluded that the Association's attorney's fees are not recoverable because all were incurred before a Section 209.007 hearing was concluded, see Tex. Prop. Code § 209.008(b), we sustain Dao's fifth issue.
We modify the judgment to eliminate the award of attorney's fees to the Association. We affirm the judgment as modified.
1. Dao acknowledged the fountain served an additional purpose in helping to combat summer heat.
2. In her testimony, Leighton distinguished birdbaths that were present in the subdivision from fountains. She stated that birdbaths are not considered fountains and are permitted with ACC approval.
3. In its conclusions, the trial court did not identify any specific section of Article IV; however, as indicated, Article IV concerns the ACC and includes, among other things, requirements for its approval of building plans and minimum construction standards. Section 1 of the Guidelines also concerns ACC approval, stating: “Improvements of any type, including, but not limited to, construction, erection, alteration, remodeling or placement on any lot without written approval of the [ACC] are prohibited.” Section 4 provides “Guidelines for Placement of Items in Front Yard of House,” and states that the “[p]lacement of play sets, swing sets, statues and sculptures where they are visible from the street is prohibited.” The Association did not specifically plead violations of these provisions in the Restrictions and Guidelines.
4. There is no dispute the Association is a “property owners’ association” subject to the requirements of Chapter 209. See Tex. Prop. Code §§ 209.002(7) (defining property owners’ association), 209.003(c) (providing Chapter 209 “applies to a residential property owners’ association regardless of whether the entity is designated as a ‘homeowners’ association,’ ‘community association,’ or similar designation in the restrictions or dedicatory instrument”).
5. This opinion references and cites to the version of Section 209.007 in effect at the time the underlying lawsuit was filed and decided, prior to the statute's amendments effective September 1, 2021. See Tex. Prop. Code § 209.007, amended by Acts 2021, 87th Leg., ch. 951 (S.B. 1588), §§ 18, 22(2), eff. Sept. 1, 2021.
6. Dao's third issue also includes a complaint that the Association failed to present evidence of the existence of imminent harm.
7. In his reply brief, Dao argues for the first time that the trial court misconstrued Article III, Section 1 and Article IV of the Restrictions in finding a violation of those provisions. Because he did not make these arguments in his opening appellate brief, however, he has waived them. See In re Guardianship of Whitt, 407 S.W.3d 495, 497 n.3 (Tex. App.—Houston [14th Dist.] 2013, no pet.) (noting appellant may not avoid waiver in its opening brief by presenting argument for first time in its reply). Likewise, Dao has waived the other arguments that he raised for the first time in his reply brief, including the violations of the Restrictions found by the trial court were not “substantial violations.” See id.
8. In his reply brief, Dao argues that it is irrelevant whether any other fountains had been removed by the time of trial because the real inquiry is whether other fountains existed at the time the Association informed Dao that his unapproved fountain must be removed, citing Nolan in support. See Nolan v. Hunter, No. 04-13-00072-CV, 2013 WL 5431050, at *4 (Tex. App.—San Antonio Sept. 25, 2013, no pet.) (mem. op.) (citing evidence that “at the time the [architectural control committee's] letter was written, there were other wood, ‘privacy’ fences similar to the fence proposed by the Hunters”). Even assuming without deciding that Dao is correct on the relevant inquiry, the Association's admission still is not evidence that overcomes the statutory presumption of reasonableness because it does not provide any information from which the trial court could determine when the other fountain was installed and whether it was present when the Association notified Dao of his violation.
Amparo Guerra, Justice
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Docket No: NO. 01-20-00597-CV
Decided: August 02, 2022
Court: Court of Appeals of Texas, Houston (1st Dist.).
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