Zuehl Land Development, LLC, Dorothy Golding and Diane Wiemann v. Zuehl Airport Flying Community Owners Association, Inc., 01-14-00562-CV

Background

ZAFCOA (the homeowners association) built a boundary fence (on association-owned common area) separating the platted subdivision from adjacent unplatted “Lands Reserved for Future Development” (LRFD). The fence was repeatedly damaged by opponents, prompting litigation beginning in 2008.
Multiple tribunals (trial court and an arbitrator) repeatedly upheld the association’s right to keep/restore the fence and enjoined interference with it.
The parties ultimately submitted an agreed Partial Summary Judgment (June 27, 2012) that: denied all parties’ claims for breach of restrictive covenants (a “take nothing” on breach), declared certain association rights (e.g., Lot 119 is private), and noted ZAFCOA had voluntarily removed the fence before the entry.
The trial court found that appellant Dorothy Golding gave false affidavits/deposition testimony and concealed a recorded warranty deed conveying the LRFD; after hearings the court ordered sanctions against Golding of $30,528 for discovery/affidavit abuses and incorporated that award into the Final Judgment (May 21, 2014).
Appellants sought attorneys’ fees under Tex. Prop. Code §5.006 (mandatory fees for prevailing party in action based on breach of restrictive covenant). The trial court denied all fee claims, holding no party had “prevailed” on a breach claim.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether appellants prevailed for mandatory fees under Tex. Prop. Code §5.006	Appellants contend they obtained relief (ultimately sought removal of fence) and therefore are prevailing parties entitled to fees.	ZAFCOA argues the Partial Summary Judgment expressly denied breach claims and ordered plaintiffs to "take nothing," so appellants did not prevail on a breach action and §5.006 does not apply.	Court upheld denial of fee claim: plaintiffs did not prevail on breach of restrictive covenant (no damages/relief on that claim).
Whether trial court abused discretion by imposing sanctions on Golding for false affidavits, discovery abuses, and groundless pleadings	Golding contends sanctions were unsupported/abusive and she lacked sufficient opportunity to defend at the sanctions hearing.	ZAFCOA points to documentary record, withheld deed, inconsistent affidavits/deposition, prior perjury conviction/probation, and court findings; Golding was present at the hearing where bad faith was found and later failed to present exculpatory evidence.	Court affirmed sanctions: trial court did not act arbitrarily; sanctions were supported by record and within its discretion.
Whether the amount of sanctions was excessive and preserved for review	Golding argues the sanctions amount is excessive.	ZAFCOA contends Golding never challenged excessiveness in trial court (no motion for new trial or objection), thereby waiving the issue.	Held: challenge to excessiveness waived for appellate review; amount not shown to be an abuse of discretion.
Whether due process/evidentiary sufficiency required more proof before sanctions	Golding argues lack of affirmative showing of bad faith and absence at the liquidation hearing deprived her.	ZAFCOA notes the court relied on prior hearing where Golding was present but did not testify, the documentary record (including withheld deed), and admissible evidence of attorneys' fees.	Held: due process satisfied; ample record and proceedings supported finding of bad faith and sanctions.

Key Cases Cited

Anderson v. New Prop. Owners' Ass'n of Newport, Inc., 122 S.W.3d 378 (Tex. App. 2003) (defining prevailing-party concepts in property-owner association disputes)
Intercont'l Group P'ship v. KB Home Lone Star, L.P., 295 S.W.3d 650 (Tex. 2009) (prevailing party requires actual and meaningful relief that alters legal relationship)
Farrar v. Hobby, 406 U.S. 103 (U.S. 1992) (federal standard for meaningful relief in fee awards)
Brooks v. Northglen Ass'n, 141 S.W.3d 158 (Tex. 2004) (discretion to deny fees where both parties have legitimate interests)
Low v. Henry, 221 S.W.3d 609 (Tex. 2007) (abuse-of-discretion standard for sanctions review)
Cire v. Cummings, 134 S.W.3d 835 (Tex. 2004) (standards and limits for discovery sanctions)
TransAmerican Natural Gas Corp. v. Powell, 811 S.W.2d 913 (Tex. 1991) (reasonableness and proportionality factors for discovery sanctions)
Unifund CCR Partners v. Villa, 299 S.W.3d 92 (Tex. 2009) (sanctions review and evidentiary sufficiency)
E.I. du Pont de Nemours & Co. v. Robinson, 923 S.W.2d 549 (Tex. 1995) (appellate deference to trial court discretion)
GTE Commc'ns Sys. Corp. v. Tanner, 856 S.W.2d 725 (Tex. 1993) (presumption of good-faith pleadings and when it may be overcome)