432 S.W.3d 381
Tex. App.2014Background
- Teal Trading owns ~1,832 contiguous acres spanning Kerr and Kendall Counties; 660 acres (the "Privilege Creek tract") traces to E.J. Cop’s original 9,245.95-acre tract. Cop recorded a Declaration (June 4, 1998) containing a one-foot "non-access" restriction along the perimeter of his tract.
- The non-access restriction bars persons other than Cop or his assigns from granting access across the original Cop tract boundary (i.e., it limits access rights along that edge). Cop conveyed parcels; deeds in Teal’s chain reference the Declaration as property being conveyed “subject to” recorded matters.
- Subsequent conveyances: Cop → Luigs → Bowmans → Mallard → BTEX → Teal (via foreclosure). Some of Teal’s adjoining acreage was never part of Cop’s original tract; that acreage is thus separated from the Privilege Creek tract by the non-access restriction.
- Champee Springs (representing neighboring subdivision owners) sued for a declaratory judgment that Teal is estopped by deed from contesting the restriction and that the restriction is enforceable; Teal counterclaimed challenging validity (easement/servitude), waiver, and public-policy and restraint-on-alienation arguments.
- At summary judgment the trial court granted Champee Springs’ motion (estoppel by deed) and denied Teal’s motions; awarded attorney’s fees to Champee Springs. The court of appeals reversed, holding neither party met summary-judgment burdens and that Teal is not estopped by deed.
Issues
| Issue | Plaintiff's Argument (Champee Springs) | Defendant's Argument (Teal Trading) | Held |
|---|---|---|---|
| Whether Teal is estopped by deed from challenging validity/enforceability of the non-access restriction | Deeds in Teal’s chain describe property as “subject to” Cop’s Declaration, so grantees acknowledged and are estopped to contest validity | “Subject to” language is notice only or protects grantor’s warranty; does not acknowledge restrictions’ validity | Reversed trial court: "subject to" clauses here did not acknowledge validity; Teal is not estopped by deed |
| Whether the non-access restriction is a valid easement/servitude | Restriction runs with the land and is enforceable as a negative easement/restrictive covenant | Argues Cop merely purported to retain prohibition (no dominant estate/easement) | Court: Teal failed to prove as a matter of law that restriction is not a valid servitude; summary judgment denied for Teal |
| Whether signatories to a 1999 replat waived enforcement / are estopped from enforcing the restriction | N/A (Champee Springs contends no waiver) | Replat language (“reserve strips/nonaccess easements are not allowed unless dedicated to the county”) shows waiver/abandonment | Court: Language insufficient to establish waiver as a matter of law; factual dispute remains |
| Whether the restriction is void as against public policy / restraint on alienation or use | N/A (Champee Springs defends enforceability) | Restriction conflicts with county subdivision rules, creates access island, and unreasonably restrains alienation/use | Court: Teal did not prove the restriction violated applicable county regulations at the time of creation or that it was an unreasonable restraint as a matter of law; summary judgment denied for Teal |
Key Cases Cited
- Greene v. White, 153 S.W.2d 575 (Tex. 1941) (recitals in deed can bind parties and their privies as between themselves)
- Cockrell v. Texas Gulf Co., 299 S.W.2d 672 (Tex. 1957) ("subject to" clauses can incorporate existing leases/terms into the estate conveyed depending on context)
- Stout v. Rhodes, 373 S.W.2d 94 (Tex. Civ. App.—San Antonio 1963) ("subject to" is notice/qualification, not an acknowledgment of restrictions’ present validity)
- XTO Energy Inc. v. Nikolai, 357 S.W.3d 47 (Tex. App.—Fort Worth 2011) (doctrine of estoppel by deed binds parties and successors to recitals, reservations, and exceptions)
- Davis v. Huey, 620 S.W.2d 561 (Tex. 1981) (restrictive covenants bind only those with actual or constructive notice)
- Sonny Arnold, Inc. v. Sentry Sav. Ass’n, 633 S.W.2d 811 (Tex. 1982) (framework for analyzing restraints on alienation)
- Mattern v. Herzog, 367 S.W.2d 312 (Tex. 1963) (indirect restraints on alienation are disfavored but require relation to the evil targeted to be invalidated)
- Evans v. Pollock, 796 S.W.2d 465 (Tex. 1990) (recognition of negative reciprocal easements/restrictive covenants)