Moseley v. Arnold
486 S.W.3d 656
| Tex. App. | 2016Background
- In 1985 Douglas B. Moseley sold a five-acre parcel (with an operating truck stop) to Robert and Nancy Gorman and contemporaneously executed a separate restrictive covenant burdening Moseley’s adjacent 6.379-acre Retained Tract forbidding its use "as a truck stop and fuel stop" to "protect the value and desirability" of the five acres.
- The covenant referenced the contract of sale but was a distinct recorded instrument; the warranty deed conveying the five acres did not reference the covenant.
- The five-acre truck stop later burned and all structures/tanks were removed; the five acres has remained unimproved and has passed through multiple owners and is now owned by Sherrie Arnold (successor to the Gormans’ interest).
- Arnold refused to release the covenant in 2013, blocking Moseley’s attempted sale of the Retained Tract for an apparent truck-stop development. Arnold sued for declaratory judgment; Moseley sought a declaration the covenant was unenforceable (arguing lack of standing and changed conditions).
- The trial court granted Arnold summary judgment that the covenant is enforceable. The appellate court reverses and remands, holding Arnold has standing but genuine fact issues on changed conditions preclude summary judgment.
Issues
| Issue | Plaintiff's Argument (Arnold) | Defendant's Argument (Moseley) | Held |
|---|---|---|---|
| Standing to enforce restrictive covenant | The covenant was intended to "protect the value and desirability" of the five-acre tract; successors in interest to that tract (Arnold) are intended beneficiaries and may enforce it | The covenant names the Gormans (and their successors/assignees) as beneficiaries in the covenant document and was delivered as a separate instrument; absent a written assignment or deed reference, Arnold lacks privity/standing | Arnold has standing: covenant, read as a whole, intended to benefit the five-acre tract and its owners, and Arnold is successor to the Gormans’ interest |
| Whether covenant ran with the land | N/A (Arnold conceded it ran with the land below) | Moseley conceded at trial the covenant runs with the land | Covenant runs with the land (conceded) |
| Changed-conditions defense (does destruction/nonrebuilding of original truck stop defeat covenant’s purpose?) | The covenant still protects the five-acre tract’s value by preventing a competing truck stop; absence of development across the highway is a real benefit | The covenant’s purpose was to protect an operational truck stop sold as a going concern; the truck stop’s destruction and 24+ years of non-redevelopment show the covenant no longer secures the intended benefits | Ambiguity as to covenant purpose creates fact issue; evidence of long nonuse and valuation disparity raises fact questions on changed conditions—summary judgment improper |
| Proper disposition on cross-motions for summary judgment | Arnold sought enforcement; trial court entered final judgment for Arnold | Moseley sought cancellation based on changed conditions and lack of standing | Appellate court reverses trial court’s summary judgment for Arnold and remands for trial on factual disputes (standing affirmed; changed-conditions unresolved) |
Key Cases Cited
- Tex. Ass’n of Bus. v. Tex. Air Control Bd., 852 S.W.2d 440 (Tex. 1993) (standing is a constitutional prerequisite; lack of standing deprives a court of subject-matter jurisdiction)
- Austin Nursing Ctr., Inc. v. Lovato, 171 S.W.3d 845 (Tex. 2005) (lack of standing deprives court of jurisdiction)
- Pilarcik v. Emmons, 966 S.W.2d 474 (Tex. 1998) (rules for construing restrictive covenants; ambiguity is a question of law)
- Brownlee v. Brownlee, 665 S.W.2d 111 (Tex. 1984) (party relying on affirmative defense must present summary-judgment evidence to raise fact issue on each element)
- Cowling v. Colligan, 312 S.W.2d 943 (Tex. 1958) (changed conditions in restricted area or surroundings can justify refusal to enforce a restrictive covenant)
- Overton v. Ragland, 54 S.W.2d 240 (Tex. Civ. App. Amarillo 1932) (changed neighborhood conditions terminating a residential restriction)
- Lehmann v. Har-Con Corp., 39 S.W.3d 191 (Tex. 2001) (final-judgment finality for purposes of appeal)