Case Information

*0 FILED IN 6th COURT OF APPEALS TEXARKANA, TEXAS 11/4/2015 4:14:37 PM DEBBIE AUTREY Clerk *1 ACCEPTED 06-15-00031-CV SIXTH COURT OF APPEALS TEXARKANA, TEXAS 11/4/2015 4:14:37 PM DEBBIE AUTREY CLERK

No. 06-15-00031-CV

IN THE COURT OF APPEALS FOR THE SIXTH SUPREME JUDICIAL DISTRICT OF TEXAS AT TEXARKANA, TEXAS

DOUGLAS B. MOSELEY,

Appellant,

vs.

SHERRIE ARNOLD,

Appellee. Appeal from the 71 st District Court of Harrison County, Texas

Honorable Brad Morin APPELLEE’S BRIEF

Appellee respectfully requests oral argument only if Appellant’s request for oral argument is granted.

TO THE HONORABLE COURT OF APPEALS:

Sherrie Arnold (the “Appellee”) files this Appellee’s Brief in response to Douglas B. Moseley’s (the “Appellant”) Appellant’s Brief filed in this Court on the

11 th day of September, 2015.

TABLE OF CONTENTS

INDEX OF AUTHORITIES .................................................................................. iv

STATEMENT REQUESTING ORAL ARGUMENT ............................................. 1

ISSUES PRESENTED ............................................................................................. 2

STATEMENT OF FACTS ....................................................................................... 3

Appellant’s Sale of the Five (5) Acres .......................................................... 3 The Restrictive Covenant .............................................................................. 3 Chain of Title Into Appellee .......................................................................... 4 SUMMARY OF THE ARGUMENT ....................................................................... 5

ARGUMENT AND AUTHORITIES ...................................................................... 7

The Court Must Uphold the December Summary Judgment on Any Ground Asserted by Appellee that is Supported by Evidence and Pleadings ............ 7 Appellee Has the Right to Enforce the Restrictive Covenant ....................... 7 The Doctrine of Changed Circumstances Does Not Apply as a Matter of Law .............................................................................................. 13 Appellant Presented No Evidence of Changed Circumstances ................... 17 To the Extent Waiver and Abandonment are Properly Before the Court, Waiver and Abandonment Do Not Apply as a Matter of Law .................... 17 Appellant’s Claim for Breach of the Contract of Sale Fails for Multiple Reasons ........................................................................................................ 19 SUMMARY ............................................................................................................ 22

PRAYER ................................................................................................................ 22

iii

INDEX OF AUTHORITIES

Cases

Abernathy v. Adoue , 49 S.W.2d 476 (Tex. Civ. App.—Beaumont 1932) ........................ 14

Anderson v. New Property Owners’ Assn’ of Newport, Inc. , 122 S.W.3d 378, 384-85

(Tex. App.—Texarkana 2003, pet. denied) ..................................................................... 9 Aull v. Kraft , 286 S.W.2d 460, 461 (Tex. Civ. App.—Waco 1956, writ ref'd n.r.e.) ......... 9

Bethea v. Lockhart , 127 S.W.2d 1029 (Tex. Civ App.—Amarillo 1939, writ ref’d) ....... 13

Carr v. Brasher , 776 S.W.2d 567, 569 (Tex. 1989) ............................................................ 7

Consol. Bearing & Supply Co. v. First Nat’l Bank , 720 S.W.2d 647, 650-51 (Tex. App.—

Amarillo, no writ) .......................................................................................................... 19 Cowling v. Colligan, 312 S.W.2d 943 (Tex. 1958) ............................................... 13, 15, 18

Dempsey v. Apache Shores Property Owners Ass'n, 737 S.W.2d 589, 597 (Tex. App.

Austin 1987, no writ) ............................................................................................... 13, 15 Draper v. Gochman , 400 S.W.2d 545, 548 (Tex. 1966) ............................................. 19, 20

El Chico Corp. v. Poole, 752 S.W.2d 306, 315 (Tex. 1987) ............................................... 7

Giles v. Cardenas , 697 S.W.2d 422, 427 (Tex. App.—San Antonio 1985, writ ref’d n.r.e.)

.......................................................................................................................................... 9 Girsh v. St. John , 218 S.W.3d 921, 923-924 (Tex. App.—Beaumont 2006, no pet.) ......... 9

Green Ave. Apartments v. Chambers , 239 S.W.2d 675 (Tex. Civ. App. – Beaumont 1951,

no writ) ............................................................................................................................. 9 Green v. Gerner , 289 S.W. 999, 1000 (Tex. Comm'n App. 1927) ..................................... 9

Overton v. Ragland , 54 S.W.2d 240 (Tex. Civ. App.—Amarillo 1933, writ dism’d) ...... 14

Ragland v. Overton , 44 S.W.2d 768 (Tex. Civ. App.—Amarillo 1931, no writ) ............. 14

Scaling v. Sutton , 167 S.W.2d 275, 278-9 (Tex. Civ. App. – Fort Worth 1942), writ

refused W.O.M. (May 26, 1943) .......................................................................... 9, 13, 15 iv

Strather v. Dolgen Corp. of Texas, Inc. , 96 S.W.3d 420, 422-23 (Tex. App.—Texarkana

2002, no pet.) . .................................................................................................................. 7 Statutes

T EX . C IV . P RAC . & R EM . C ODE § 16.051 .......................................................................... 21

T EX . P ROP . C ODE § 13.001. ............................................................................................... 19

T EX . P ROP . C ODE § 202.003. ............................................................................................. 10

v *6 STATEMENT REQUESTING ORAL ARGUMENT Appellee respectfully requests oral argument only if Appellant’s request for oral argument is granted.

ISSUES PRESENTED I. The Trial Court correctly entered Final Judgment in favor of Appellee, relying upon the November Partial Summary Judgment Order and the December Partial Summary Judgment Order.

II. The Trial Court correctly entered the November Partial Summary Judgment Order.

III. The Trial Court correctly entered the December Partial Summary Judgment Order.

IV. An interested property owner who benefits from a restrictive covenant has standing to enforce the restrictive covenant.

V. Appellant did not create an issue of fact under the doctrine of Changed Circumstances.

STATEMENT OF FACTS

A. Appellant’s Sale of the Five (5) Acres

On July 31, 1985 Appellant entered into a Contract of Sale with Robert T.

Gorman for the sale of five acres and a truck stop (the “5 Acres”) located on the

southeast corner of Highway 43 and Interstate 20 in Harrison County, Texas.

(R.68-75). On or about September 16, 1985, Appellant conveyed his interest in a

five (5) acre tract of land with an existing and operational truck stop to Robert T.

Gorman and wife, Nancy S. Gorman (the “Gormans”). (R.79-81).

B. The Restrictive Covenant

One of the negotiated terms of the Contract of Sale was for a Restrictive Covenant to be placed on a 6.379 acre tract of land (the “6.3 Acres”), located

across the Highway from the 5 Acres, restricting Appellant, his heirs,

administrators, successors and assigns from developing or using the 6.3 Acres as a

truck stop or fuel stop “to protect the value and desirability of the 5 acre tract or

parcel of land purchased by Robert T. Gorman….” (R.76-78). The Restrictive

Covenant restricted Appellant, his heirs, administrators, successors and assigns

from developing and using the 6.3 Acres as a truck stop and fuel stop “to protect

the value and desirability of the 5 acre tract or parcel of land purchased by Robert

T. Gorman…and such restriction shall run with the real property….” (R.76-78).

The restriction contained no limited term of duration. The Restrictive Covenant

further states that “such restriction shall run with the real property and be binding

on all parties having any right, title or interest in and to the [herein described 6.3

Acres].” (R.76-78).

Appellant now contends that the Restrictive Covenant is invalid despite having negotiated for the restriction in the Contract of Sale, and having been

compensated $971,500 in 1985 for the sale of the 5 Acres and for placing the

restriction on his property. (R.82-95). Appellant has shown that a new deal has

come along that would now highly compensate him for the 6.3 Acres, and seeks to

remove the restriction on the 6.3 Acres so that he can be paid again, despite having

previously bargained for his current position. (R. 82-95).

C. Chain of Title Into Appellee

It is undisputed that Appellee is the owner of the fee with regard to the 5 Acres. Appellant’s Brief at P. 6.

SUMMARY OF THE ARGUMENT Appellee has the right to enforce the Restrictive Covenant, as it is a covenant running with the land benefitting the owner of the 5 Acres. As the owner of the 5

Acres at issue, Appellee has an interest in the property and the right to enforce it

pursuant to Texas law.

The Doctrine of Changed Circumstances, also called Changed Conditions, is inapplicable to the facts of this case, as asserted by Appellant. The undisputed

facts are clear that Appellee derives a substantial benefit from the 5 Acres, and that

there have been no changes in the surrounding area that would make it so that

Appellee cannot secure a substantial degree of the benefits sought to be realized.

To the extent that Waiver or Abandonment were properly raised before this Court, which Appellee contends they were not, there has been no violation of the

Restrictive Covenant as to amount to an abandonment of the covenant or a waiver

of the right to enforce it.

The facts and analysis set forth by Appellant regarding the circumstances surrounding the alleged breach of the Contract of Sale are irrelevant, as no issue

regarding the transaction, including an alleged breach of contract, is properly

before this Court. Furthermore, the breach of contract argument fails by virtue of

the Statute of Limitations, the right of first refusal (being the provision alleged to

be breached) is only a personal covenant, and the right of first refusal was

unrecorded, and therefore void as to Appellee.

ARGUMENT AND AUTHORITIES A. The Court Must Uphold the December Summary Judgment on Any Ground Asserted by Appellee that is Supported by Evidence and Pleadings

When the order granting summary judgment does not specify the particular

grounds the trial court sustained, the appellate court must uphold the summary

judgment on any ground asserted by the movant that is supported by the evidence

by the evidence and pleadings. Carr v. Brasher , 776 S.W.2d 567, 569 (Tex. 1989).

When the trial court does not specify on what basis it granted summary judgment,

the appellant must argue that every ground in the summary judgment motion is

erroneous. Strather v. Dolgen Corp. of Texas, Inc. , 96 S.W.3d 420, 422-23 (Tex.

App.—Texarkana 2002, no pet.).

B. Appellee Has the Right to Enforce the Restrictive Covenant The Restrictive Covenant serves two purposes. By the plain language of the Restrictive Covenant, it is meant to (1) restrict the 6.3 Acres from the building of a

fuel or truck stop for the benefit of the 5 Acres, and (2) be for the benefit of the

Gormans, and their successors and assigns (the current successor is Appellee).

(R76-78). Without any authority, Appellant would have this Court believe that

because the Restrictive Covenant was not assigned, and despite the fact that the

Appellee was the successor in interest to the Gormans’ ownership of the benefitted

5 Acres, the Restrictive Covenant terminated upon the first sale of the 5 Acres that

occurred after the initial sale from Moseley to the Gormans.

It is undisputed that the Restrictive Covenant in question is one running with the land. ^[1]

The Restrictive Covenant is clearly intended to protect both the 5 acres in question and Appellee. The Restrictive Covenant, in pertinent part, reads as

follows:

...[F]or the benefit of Robert T. Gorman and wife, Nancy S. gorman (sic), and their successors and assigns, and to bind Douglas B. Moseley and his heirs, administrators, successors and assigns, the said Douglas B. Moseley declares that the aforementioned 6.379 acre tract or parcel of land may not be developed and used as a truck stop and fuel stop to protect the value and desirability of the 5 acre tract or parcel of land purchased by Robert T. Gorman and wife, Nancy S. gorman (sic), from said Douglas B. Moseley, and such restriction shall run with the real property and shall be binding on all parties having any right, title or interest in and to the above-described 6.379 acre tract or parcel of land.

(R.76-78). The plain language of the Restrictive Covenant shows that said

restriction was made to protect the value and desirability of the 5 Acres.

As Appellant sets forth in his brief, a suit for the enforcement of a restrictive covenant is maintainable only by one for whose benefit the covenant was intended.

*14 Scaling v. Sutton , 167 S.W.2d 275, 278-9 (Tex. Civ. App. – Fort Worth 1942), writ

refused W.O.M. (May 26, 1943); Green Ave. Apartments v. Chambers , 239 S.W.2d

675 (Tex. Civ. App. – Beaumont 1951, no writ); Aull v. Kraft , 286 S.W.2d 460,

461 (Tex. Civ. App.—Waco 1956, writ ref'd n.r.e.); Green v. Gerner , 289 S.W.

999, 1000 (Tex. Comm'n App. 1927).

Because the Restrictive Covenant was to protect the value and desirability of the 5 Acres, it is clear that the party to be benefited by the covenant is the owner of

the 5 Acres. Unless a restrictive covenant has been removed by agreement of all

interested property owners or by declaratory judgment, it may be enforced by any

interested property owner. Giles v. Cardenas , 697 S.W.2d 422, 427 (Tex. App.—

San Antonio 1985, writ ref’d n.r.e.); see Girsh v. St. John , 218 S.W.3d 921, 923-

924 (Tex. App.—Beaumont 2006, no pet.); Anderson v. New Property Owners’

Assn’ of Newport, Inc. , 122 S.W.3d 378, 384-85 (Tex. App.—Texarkana 2003, pet.

denied) (property owner may sue to enforce restrictive covenant).

Any person entitled to benefit under a restrictive covenant may enforce it.

Anderson , 122 S.W.3d at 384. In the case at hand, a tract of land purchased by the

Gormans, the 5 Acres, and the successors to the Gormans’ interest, were intended

to benefit from the Restrictive Covenant. The Restrictive Covenant specifically

states that the restriction placed on the 6.3 Acres prohibiting development or use of

the 6.3 Acres for a truck stop and fuel stop is “to protect the value and desirability

of the [5 Acres].” (R.76-78)

As a successor in ownership to the 5 Acres, Appellee is an interested property owner in the 5 Acres to be benefitted from the restriction, and is therefore

entitled to enforce the Restrictive Covenant placed upon the 6.3 Acres. Appellee is

a successor to the Gormans’ interest in the 5 Acres, as admitted by Appellant,

which is exactly the type of beneficiary the restriction contemplated by its very

terms. The Restrictive Covenant is a validly recorded document that was

negotiated for, by, and between Gorman and Appellant. Appellant received

consideration for the restriction, and then placed the restriction on his property.

Appellant admits that the Restrictive Covenant is clear and unambiguous as to the

beneficiaries of said restriction, and the successors to the Gormans’ interest in the

5 Acres, including Appellee, are those that the Restrictive Covenant is

unambiguously intended to protect.

A Restrictive Covenant shall be liberally construed to give effect to its purpose and intent. T EX . P ROP . C ODE § 202.003. Appellant asserts that the term

“successor” in the Restrictive Covenant can only mean one who is conveyed the

Restrictive Covenant itself. Appellant’s only analysis to the Trial Court in this

regard was a conclusory statement that “‘successor can only mean a party who

succeeds to the Restrictive Covenant” because the Warranty Deed does not

mention the Restrictive Covenant. Appellant completely fails to direct this Court

to the other language contained in the Restrictive Covenant that expressly sets

forth that the restriction is being placed on the property per the Contract of Sale for

the 5 Acres to Gorman. It is obvious, by the plain language of the Restrictive

Covenant, that the restriction is in consideration for the purchase of the 5 Acres to

which Appellee succeeded into ownership. The fact that Appellant intended to

restrict his property in consideration of the purchase of the 5 Acres is clear and

unambiguous. The Restrictive Covenant even states that the restriction is “in

partial consideration of the Contract of Sale….” The clear intent of the parties was

to restrict the 6.3 Acres in favor of the 5 Acres, and in return, Appellant was fairly

compensated for the sale and restriction.

Appellee also directs the Court to the terms of the Warranty Deed under which she took title to the 5 Acres. Said Warranty Deed, attached hereto as

Appendix A, and recorded at Document Number 2010-000014396, includes a

conveyance of the 5 Acres, “together with all and singular the rights and

appurtenances thereto….” Therefore, the right to enforce the Restrictive Covenant

was necessarily conveyed to Appellee upon her purchase by virtue of the terms of

the Warranty Deed which conveyed the 5 Acres to her.

Appellee wishes to make sure the Court is aware that the Restrictive Covenant has served the exact purpose it was intended for in this case. Appellant

restricted himself, his successors and assigns from building a truck stop on the 6.3

Acres. Upon attempting to violate the Restrictive Covenant by selling his interest

in the 6.3 Acres for the building of a truck stop, the title company located the

Restrictive Covenant, and informed Appellant that it had to be released in order to

proceed. (R.65).

Appellant’s assertion that the Deed Restriction itself had to be conveyed is simply incorrect, and would cause a domino effect of consequences for Texas

subdivisions and zoning. Restrictive Covenants, sometimes referred to as

Covenants, Conditions and Restrictions by residential subdivisions, are filed in the

Official Public Records of the county in which the property is located. Those

restrictions do not have to be amended or transferred and updated every time a new

homeowner purchases property within the subdivision. Appellant asks this Court

to enforce a remedy that would require all filed restrictions to be specifically

conveyed by the benefitted party to a successor in interest, which is not the purpose

of restrictive covenants in general. The purpose is to restrict property from certain

uses for the benefit of, or in favor of, another property or a subdivision as a whole.

The covenant runs with the restricted land, and the benefitted land. To suggest that

such restrictions are not valid unless specifically conveyed by the benefitted

property owner would frustrate the entire purpose of restrictive covenants because

under Appellant’s unsupported argument, the failure to specifically convey the

restriction would effectively terminate the restrictive covenant. Appellant has

provided no law to support such an argument, Appellant has only provided his

incomplete argument as to what he believes the Restrictive Covenant states.

C. The Doctrine of Changed Circumstances Does Not Apply as a Matter of Law

The doctrine of Changed Circumstances, also called “Changed Conditions” has most uniformly been used in the case of residential restrictions in subdivisions.

The law stands for the fact that equity demands a release of restrictive covenants

when changes in the restricted area or the immediately surrounding area make it so

that it is no longer possible to secure to a substantial degree the benefits sought to

be realized by the owner. Dempsey v. Apache Shores Property Owners Ass’n , 737

S.W.2d 589, 597 (Tex. App. Austin 1987, no writ) (citing Cowling v. Colligan , 312

S.W.2d 943, 946 (Tex. 1958)).

Appellant has set forth, in his Appellant’s Brief and his Motion for Partial Summary Judgment in the Trial Court that the change must be so radical as to

render perpetuation of the restriction of no substantial benefit to the dominant

estate, and the original purpose of the restriction has been defeated. Appellant’s

Brief P. 17; citing Cowling, 312 S.W.2d 943; Scaling v. Sutton , 167 S.W.2d 275

(Tex. Civ. App.—Fort Worth 1942, writ ref’d w.o.m.); Bethea v. Lockhart , 127

S.W.2d 1029 (Tex. Civ App.—Amarillo 1939, writ ref’d); Overton v. Ragland , 54

S.W.2d 240 (Tex. Civ. App.—Amarillo 1933, writ dism’d); Abernathy v. Adoue ,

49 S.W.2d 476 (Tex. Civ. App.—Beaumont 1932, no writ.); Ragland v. Overton ,

44 S.W.2d 768 (Tex. Civ. App.—Amarillo 1931, no writ).

It is undisputed that Appellant’s 6.3 Acres has not been used in violation of the Restrictive Covenant and in fact, Appellant currently seeks to sell the 6.3 Acres

that is restricted for a purpose in violation of the restriction, namely a truck stop or

fuel station. (R.65, 82-95). Arnold’s Affidavit in Support of Plaintiff’s Motion for

Partial Summary Judgment in the Trial Court (“Arnold’s Affidavit”), further shows

that no truck and fuel stop has been placed on the 6.3 Acres since the time of the

sale to Gorman. (R.166). Appellant’s contention that the 5 Acres has not been used

as a truck stop since a fire occurred at the one owned by Gorman has no bearing on

the benefit to Appellee.

Appellant has set forth, in Appellant’s Brief, and Motion for Partial Summary Judgment in the Trial Court, that certain events constitute changed

circumstances which would render the restriction unenforceable. Appellant’s Brief

at P. 19-20. The listed circumstances, allegedly caused by the owners of the 5

Acres, are: 1) allowing foreclosure of the property; 2) not specifically assigning the

Restrictive Covenant to any of the 6 subsequent purchasers; 3) allowing a fire to

occur at the truck stop; 4) not rebuilding the truck stop after it burned down; and 5)

allowing the remaining portions of the truck stop, including buildings,

underground tanks, etc., to all be torn down and removed. Appellant’s Brief P. 20.

None of these circumstances fulfill the law set forth above. Specifically, the law

sets forth the proposition that changes in the restricted area or the immediately

surrounding area must make it so that it is no longer possible to secure to a

substantial degree the benefits sought to be realized by the owner. See Dempsey ,

737 S.W.2d at 597 (citing Cowling , 312 S.W.2d at 946 (1958)). Furthermore, the

changes are not so radical as to render perpetuation of the restriction of no

substantial benefit to the dominant estate, or defeat the subject or purpose for the

reasons set forth herein. See Scaling , 167 S.W.2d at 275.

Even if the facts asserted by Appellant are taken as true, the alleged changed conditions are such that the Trial Court was free to decide upon those matters as a

matter of law, based, inter alia , on Cowling v. Colligan , 312 S.W.2d 943 (Tex.

1958). The actions or inactions of the owners of the 5 Acre lot are not of the type

that inhibit or prohibit the 5 Acres from being made into a truck stop or fuel stop.

The lot is currently vacant, and there is nothing that prevents the property from

being used as a truck stop once again. None of the owners of the 5 Acres have

restricted it from being used as a truck stop, and none of the owners have taken any

action that would be the basis of determining that the 5 Acres is no longer fit for

use as such.

Appellee derives a substantial benefit from the restriction in that she owns a piece of property fit for a truck stop, and she has no competition directly across the

street because Appellant sold that right when he bargained for the restriction. As

stated above, Appellant’s contention that the 5 Acres has not been used as a truck

stop since a fire at the one owned by Gorman has no bearing on the benefit to

Appellee. Obviously the right to build such a business on the property is valuable,

otherwise Appellant would not have sold the right, along with the business, for

$971,500 in 1985, nor would he have been recently offered $850,000 for his 6.3

Acres directly across the street to be used as a truck stop. (R.65, 82-95). The law

regarding changed circumstances sets forth that the changes must render the

restriction of no substantial benefit to Appellee, and any argument that Appellee

currently gains no benefit from the Restrictive Covenant is simply untrue. The

benefit of the restrictive condition has been established by the facts of this case, as

Appellant is unable to sell the 6.3 Acres for use as a truck stop for $850,000, and

Appellee retains exclusivity between the two tracts for such use.

Finally, with regard to the benefit derived by Appellee, Appellant admits in Appellant’s Brief that Appellee derives an advantage from the Restrictive

Covenant, and that the Restrictive Covenant has protected the 5 Acres for over 20

years. Appellee’s Brief at P. 7 (citing R.65).

Therefore, as a matter of law, changed circumstances does not apply to the facts at hand.

D. Appellant Presented No Evidence of Changed Circumstances Appellant requests that this Court find that questions of material fact exist with regard to the doctrine of Changed Circumstances; however, Appellee would

show that all facts alleged to support Appellant’s argument in this regard, even if

taken as true, are not sufficient to create a fact issue on Changed Circumstances.

On the basis of the law presented in Section “C”, above, the facts presented by

Appellant in the Trial Court do not render the restriction to be of no substantial

benefit to Appellee, for the reasons set forth at length in Section “C”. Appellant

does not, and cannot, point this Court to any evidence in the record that would be

sufficient to create a fact issue; therefore, the Court’s December Judgment should

be upheld with regard to the Changed Circumstances argument.

E. To the Extent Waiver and Abandonment is Properly Before the Court, Waiver and Abandonment Do Not Apply as a Matter of Law While Appellee contends that Waiver and Abandonment are not properly

raised by Appellant in his Appellant’s Brief, the argument by Appellant with

regard to Changed Conditions includes argument that Appellee waived or

abandoned the benefit the Restrictive Covenant conferred. Therefore, to the extent

properly raised, Appellee sets forth that Waiver and Abandonment do not apply as

a matter of law, and that there is no evidence of Waiver or Abandonment.

Once again, the doctrine of waiver or abandonment has most uniformly been used in cases regarding residential restrictions. Waiver or abandonment in those

cases occurs when there has been an acquiescence of the lot owners in such

substantial violations within the restricted area as to amount to an abandonment of

the covenant or a waiver of the right to enforce it. Cowling , 312 S.W.2d at 461-62.

In the case at hand, Plaintiff has presented no proof, nor could there be any proof,

that there has been any violation of the restrictive covenant. As shown in Affidavit

of Sherrie Arnold, there has been no truck stop or fuel stop built on the 6.3 Acres

which would allow for an acquiescence argument. (R.166).

Therefore, as a matter of law, no waiver or abandonment of the Restrictive Covenant has occurred.

Furthermore, Plaintiff has presented no evidence of waiver or abandonment as there are no facts under which there has been acquiescence to a truck and fuel

stop being built on the 6.3 Acres, as would be required under the law as set forth

herein.

F. Appellant’s Claim for Breach of the Contract of Sale Fails for Multiple Reasons

While Appellant does not specifically make the Contract of Sale an issue in

his Issues Presented, Appellant spends considerable time in his Statement of Facts

setting forth facts surrounding an alleged breach of the Contract of Sale. Appellant

further asserted in the Trial Court that the failure of Gorman or subsequent

purchasers to honor an unrecorded Right of First Refusal excused Appellant from

any further performance under the Contract of Sale or the Restrictive Covenant.

Therefore, to the extent a breach of the Contract of Sale is properly before the

Court, which Appellee contends it is not, Appellee offers the following analysis of

the alleged breach.

The Right of First Refusal in the Contract of Sale was in no way incorporated into the Warranty Deed conveying the 5 Acres from Appellant to

Gorman. (R.79-81). There is no reference to the Contract of Sale or the Right of

First Refusal whatsoever. (R.79-81). No subsequent purchaser of the property had

notice, constructive or otherwise, that the property was subject to a right of first

refusal. An unrecorded property interest is not binding on a subsequent purchaser

who lacks notice of the interest. See T EX . P ROP . C ODE A NN . § 13.001.

Furthermore, the foreclosure and subsequent sale of the property by the lender, which was the first sale of the property after the purchase by Gorman, did

not trigger the right of first refusal under Texas law. (R.62). Involuntary transfers,

pursuant to a foreclosure sale, do not trigger a first-refusal right. See Draper v.

Gochman , 400 S.W.2d 545, 548 (Tex. 1966); Consol. Bearing & Supply Co. v.

First Nat’l Bank , 720 S.W.2d 647, 650-51 (Tex. App.—Amarillo, no writ). In

Draper , the right of first refusal gave a sublessee a preferential right to purchase

the leasehold if the “lessor desires to sell or dispose of his interest” in the property.

Draper , 400 S.W.2d at 545. After the lessor defaulted on its mortgage, the

property was sold at foreclosure. Id. The Texas Supreme Court held that the right

of first refusal was not triggered by the foreclosure sale because it was

“involuntary.” Id. at 547. In the case at hand, Appellant obtained the right of first

refusal “[i]n the event that [Gorman] decides to sell the property and/or

business….” (R.68-75). Gorman did not decide to sell the property as required by

the right of first refusal, and the sale was involuntary, which does not trigger the

right under Texas law. The remainder of the transfers or sales leading up to the

purchase by Appellee are not subject to the option either because the option was

only triggered upon Gorman’s decision to sell the property, as set forth in the plain

language of the Contract of Sale.

Appellant was put on constructive notice of the sale by the lender as of the date the Deed from such sale which was recorded in 1989; therefore, any argument

that the alleged breach irreparably harmed him was rendered null upon the running

of the statute of limitations in 1993. (R.62) Appellant has no recourse with regard

to an alleged breach of the Contract of Sale, even if such a breach had any effect

on the Restrictive Covenant at issue, which Appellee contends it does not.

The Right of First Refusal was a personal covenant between Appellant and Gorman. Any breach of the Right of First Refusal would have been a breach by

Gorman because the right, by its terms, did not run with the land, as it did not bind

successors or assigns, and was only if “Purchaser (Gorman) decides to sell the

property.” (R.68-75). Any suit for breach of the right had to be brought against

Gorman, and had to be brought within four years of the breach. T EX . C IV . P RAC . &

R EM . C ODE § 16.051. The Right of First Refusal was not referenced in the

Warranty Deed on the 5 Acres at issue, and therefore put no one on notice of the

Right of First Refusal. The first sale of the 5 Acres after the purchase by Gorman,

as shown in Appellant’s Brief, was on December 6, 1988. (R.62). Therefore, the

limitations for a suit on such alleged breach would have run in 1992. If the

limitations began to run upon the sale by the Trustee, the limitations ran as of

1993.

Finally, for the right of first refusal to be binding upon subsequent purchases, such as Appellee, it must be a covenant running with the land, and

while it does not meet the elements of a covenant running with the land, Appellee

does not brief that issue herein, as it has not been properly raised by Appellant in

this Court or in the Trial Court.

SUMMARY For the reasons set forth herein, the Trial Court correctly entered Final Judgment in favor of Appellee. Appellee has standing to enforce the Restrictive

Covenant, and Appellant created no issue of material fact regarding the doctrine of

Changed Circumstances.

PRAYER

WHEREFORE, PREMISES CONSIDERED, Appellee respectfully prays

this Honorable Court affirm the Final Judgment of the Trial Court. Appellee

further prays for such other and further relief to which Appellee may be entitled at

law or in equity, including the contingent fees awarded by the Trial Court.

Respectfully submitted, DEAN A. SEARLE Texas Bar No. 17956600 RONAN S. SEARLE Texas Bar No. 24079292 S EARLE & S EARLE , PC P.O. Box 910

305 West Rusk Street Marshall, Texas 75671 Phone (903) 935-9772 Fax (903) 935-9790 Dsearle54@gmail.com Ronan.searle@gmail.com By: /s/ Ronan S. Searle Ronan S. Searle Texas Bar No. 24079292 ATTORNEYS FOR THE APPELLEE .

CERTIFICATE OF COMPLIANCE Pursuant to Rule 9.4(i)(2) of the Texas Rules of Appellate Procedure, I hereby certify that this document contains 5,268 words.

/s/ Ronan S. Searle Ronan S. Searle *29 CERTIFICATE OF SERVICE I, the undersigned, hereby certify that, on November 4, 2015, I caused to be served the foregoing pleading upon the counsel listed below via email and also via

the Court’s electronic transmission facilities.

Gerritt M. Pronske

Melanie P. Goolsby

PRONSKE GOOLSBY & KATHMAN, P.C.

15305 Dallas Parkway, Suite 300

Addison, Texas 75001

Email: gpronske@pgkpc.com

Email: mgoolsby@pgkpc.com

/s/ Ronan S. Searle Ronan S. Searle *30 Appendix "A"

[1] Appellant, by virtue of his briefing in both the Trial Court and Appellant’s Brief, has admitted that the Restrictive Covenant is a covenant running with the land; therefore, Appellee will reserve briefing that issue. To the extent it is necessary, Appellee would direct the Court to Defendant’s Response to Appellant’s Motion for Partial Summary Judgment in the Trial Court for extensive briefing on the covenant running with the land issue, and in the alternative, requests leave for additional briefing on the merits if required by this Court.