KBG Investments, LLC v. Greenspoint Property Owners' Association, Inc.
2015 Tex. App. LEXIS 10198
| Tex. App. | 2015Background
- KBG Investments, LLC owns a commercial tract in Greenspoint subject to a Declaration; Greenspoint Property Owners’ Association enforces the Covenant.
- KBG sought and obtained Architectural Review Committee approval to paint and to post two designated signs but actually painted an unapproved bright yellow and erected four unapproved signs at non-approved locations.
- Greenspoint sued for permanent injunctive relief, declaratory relief on its lien securing fees, and statutory damages under Texas Property Code § 202.004(c).
- The trial court granted summary judgment for injunctive relief and awarded $10,400 in statutory damages plus attorney’s fees, costs, and interest.
- On appeal, KBG challenged summary judgment and the statutory-damages award; the court affirmed as modified, eliminating statutory damages but preserving injunctive relief.
- The court held that § 202.004(c) damages are exemplary damages subject to Chapter 41, which requires proof of actual damages beyond nominal damages; since Greenspoint showed no actual damages, the statutory damages award was improper.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether there was a genuine issue of material fact precluding summary judgment on violation of the covenant | KBG argued material-fact defenses (e.g., waiver/estoppel) should preclude summary judgment | Greenspoint showed unapproved painting/signs; KBG failed to raise genuine issues | Yes; summary judgment upheld; KBG failed to raise genuine issues precluding it |
| Whether statutory damages under § 202.004(c) are exemplary damages and subject to Chapter 41 | Greenspoint contends damages are not subject to Chapter 41 or require actual damages | Chapter 41 applies; damages require nominal or actual damages; no actual damages means no statutory damages | Chapter 41 applies; § 202.004(c) damages are exemplary; award vacated due to no actual damages |
Key Cases Cited
- Sanchez v. Southampton Civic Club, Inc., 367 S.W.3d 429 (Tex. App.—Houston [14th Dist.] 2012) (civil damages under § 202.004(c) are punitive)
- Uptegraph v. Sandalwood Civic Club, 312 S.W.3d 918 (Tex. App.—Houston [1st Dist.] 2010) (statutory damages can be punitive; lack of actual damages discussed)
- Flores v. Millennium Interests, Ltd., 185 S.W.3d 427 (Tex. 2005) (liquidated damages provision treated as punitive; discussion on no requirement of actual harm for statutory damages)
- Smith v. Davis, 462 S.W.3d 604 (Tex. App.—Tyler 2015) (Exemplary damages framework under Chapter 41; damages caps)
- Nabours v. Longview Sav. & Loan Ass’n, 700 S.W.2d 901 (Tex. 1985) (necessity to prove actual damage to support punitive awards)
- City of Lorena v. BMTP Holdings, L.P., 409 S.W.3d 634 (Tex. 2013) (statutory damages consistency across statutes)