Carl Storck and Vicki Storck v. Tres Lagos Property Owners Association, Inc., 442 S.W.3d 730

Background

Carl and Vicki Storck bought five adjoining lots (formerly Lots 93–97) in the Tres Lagos subdivision in 2008, then used them for a commercial business and did not pay association dues for those lots.
Tres Lagos Property Owners Association (the Association) sued/counterclaimed to declare the lots subject to subdivision covenants, assessments, and easements, to enjoin commercial use, and to recover unpaid dues and fence damages; the trial court mostly sided with the Association and awarded $4,000 in dues plus attorney’s fees.
Storck challenged the Association’s governance and election procedures, asserting (among other things) that certain meetings/elections (Sept. 2011 adjourned to July 2012) were invalid because members not current on dues were excluded from voting and the quorum was improperly calculated.
The trial court found the July 21, 2012 election valid, that the Association’s bylaws are not a dedicatory instrument requiring county recording, and enjoined Storck from commercial use; Storck appealed and requested findings, a new trial, and JNOV which the trial court denied.
On appeal the Texas Sixth Court of Appeals invalidated the July 2012 board election for lack of a proper quorum (quorum must be calculated from all owners entitled to vote), but affirmed the trial court in all other respects.

Issues

Issue	Plaintiff's Argument (Storck)	Defendant's Argument (Tres Lagos)	Held
Validity of July 2012 board election	Election invalid because members not current on dues were excluded from voting and quorum was miscalculated	Election valid; meeting was reconvened and proxies from Sept. 2011 counted to establish quorum	Election invalid — quorum must be based on all owners entitled to vote, not only members current on dues; July 2012 election lacked required quorum
Bylaw voting restriction under Property Code §209.0059	Bylaw suspension of voting rights for delinquent members is invalid because it effectively disqualifies owners from voting	Bylaws permit suspension; bylaws are not a dedicatory instrument so restriction is permitted	Voting restriction in bylaws is void to the extent it conflicts with §209.0059 because the dedicatory instrument incorporates the bylaws; restriction cannot stand
Bona fide purchaser / statute of limitations defense to Association’s counterclaim	Storck is a bona fide purchaser for value without notice (title insurance lacked exceptions) and restrictive-covenant claims are time-barred because deplat occurred in 2002	Storck waived affirmative defenses by failing to plead them under Tex. R. Civ. P. 94; trial court did not rule on them	Affirmative defenses (bona fide purchaser; statute of limitations) waived for failure to plead properly; court did not reverse on these bases
Newly discovered evidence / motion for new trial (alleged Association misconduct and competing commercial use)	Newly discovered evidence shows Association member operates a commercial business (clean-hands) and some testimony perjured — warrants new trial	Evidence insufficient and not shown to be newly discovered or material; trial court properly denied new trial	Denial of motion for new trial affirmed — evidence not shown to be newly discovered, material, or sufficiently probative to change result

Key Cases Cited

Lambright v. Trahan, 322 S.W.3d 424 (Tex. App.—Texarkana 2010) (standards for reviewing bench trial findings and credibility deference)
.39 Acres v. State, 247 S.W.3d 384 (Tex. App.—Texarkana 2008) (bench-findings review parallels jury sufficiency standards)
City of Keller v. Wilson, 168 S.W.3d 802 (Tex. 2005) (legal-sufficiency standard for reviewing fact findings)
Ford Motor Co. v. Ridgway, 135 S.W.3d 598 (Tex. 2004) (definition of "more than a scintilla" for sufficiency review)
BMC Software Belgium, N.V. v. Marchand, 83 S.W.3d 789 (Tex. 2002) (appellate review of conclusions of law de novo)
Madison v. Gordon, 39 S.W.3d 604 (Tex. 2001) (elements and nature of bona fide purchaser defense)