EWB-I, LLC v. PlazAmericas Mall Texas, LLC
527 S.W.3d 447
Tex. App.2017Background
- Sharpstown Mall (developed 1979) operated under a Restated Operating Agreement (ROA) containing long-term restrictive covenants (including a parking-ratio requirement of no less than five spaces per 1,000 sq ft of mall floor area) binding owners and successors until 2035.
- Ownership of the mall was split among multiple parties (anchor buildings, office building, main mall, parking areas). In 2009 EWB-I LLC ("Overflow Owner") acquired five overflow surface-parking tracts that had been severed from mall ownership.
- The mall declined: anchor stores closed (Foley’s padlocked since 2007), the mall converted to flea-market style uses, and portions of parking/retail were underused; PlazAmericas (owner of main mall) closed a 1,000-space parking garage in 2011.
- Overflow Owner sued for declaratory relief (seeking modification/termination of the ROA parking restrictions under changed-conditions and waiver doctrines), injunctive relief, and damages; Structure Owners moved for summary judgment and the trial court granted summary judgment/dismissed claims and awarded attorney’s fees to Structure Owners.
- The court of appeals reversed and remanded, holding that material fact issues exist on changed-conditions and waiver, that nonmoving defendants could not be granted summary judgment, and that Overflow Owner had standing to seek injunctive relief.
Issues
| Issue | Plaintiff's Argument (Overflow) | Defendant's Argument (Structure Owners) | Held |
|---|---|---|---|
| Changed-conditions doctrine | Mall decline (anchor closures, vacant Foley’s, closed garage, underused overflow lots) is a "radical" change that defeats the ROA parking-ratio purpose, so covenants should be modified/terminated | ROA intended to preserve parking availability generally (not a shifting quantitative need); restrictions still capable of securing their purpose; no impossibility shown | Reversed trial SJ: ROA ambiguous as to purpose and material fact issues exist about current/foreseeable parking needs and use of overflow lots — summary judgment inappropriate |
| Waiver of enforcement | Structure Owners waived enforcement by affirmative breaches (closing parking garage; closing access to large retail parcels; permitting carnivals; other conduct) | Nonwaiver clause in ROA and inaction cannot constitute waiver; some defendants did not move on waiver so SJ improper against them | Reversed trial SJ: fact issues exist (affirmative acts support waiver theory); nonmoving defendants could not receive SJ; nonwaiver clause does not bar waiver claims based on affirmative breaches |
| Alternative declaratory claims (e.g., build a bank; carnival operations) | Seeks declaration that Overflow Owner may develop lots (bank/retail) and that repeated carnival operations permit continuation | No live controversy; plaintiff has not taken concrete construction steps; nonwaiver clause precludes waiver by acquiescence | Reversed on ripeness: declaratory relief claim is justiciable (ripening seeds of controversy); factual disputes remain about carnival authorization and waiver |
| Injunctive relief / standing | Overflow Owner has standing because ROA covenants may inure to benefit of overflow parcels and it pleaded facts supporting injury and right to enforce | Overflow Owner lacks standing; covenants don't benefit its parcels; no injury shown; plea to jurisdiction proper | Reversed dismissal: material fact issues exist on whether covenants were intended to benefit overflow lots and whether Overflow Owner has standing; injunctive claims should not have been dismissed |
Key Cases Cited
- Cowling v. Colligan, 312 S.W.2d 943 (Tex. 1958) (court may refuse to enforce a restriction when changed conditions make enforcement unable to secure the restriction's purpose)
- Simon v. Henrichson, 394 S.W.2d 249 (Tex. Civ. App. 1965) (changed-conditions must be "radical"; factors for analysis)
- Moseley v. Arnold, 486 S.W.3d 656 (Tex. App.—Texarkana 2016) (changed-conditions inquiry is fact-intensive; ambiguity on purpose precludes SJ)
- Shields LP v. Bradberry, 526 S.W.3d 471 (Tex. 2017) (anti-waiver/nonwaiver clauses have limits; nonwaiver clause can be waived by conduct but waiver requires acts inconsistent with clause)
- Tenneco Inc. v. Enter. Prods. Co., 925 S.W.2d 640 (Tex. 1996) (elements of waiver: existing right, knowledge, and intentional relinquishment or inconsistent conduct)
- Italian Cowboy Partners, Ltd. v. Prudential Ins. Co. of Am., 341 S.W.3d 323 (Tex. 2011) (contract interpretation principles: give effect to instrument language; ambiguity creates fact issue)