KBG INVESTMENTS, LLC, Appellant v. GREENSPOINT PROPERTY OWNERS’ ASSOCIATION, INC., Appellee
NO. 14-14-00484-CV
Court of Appeals of Texas, Houston (14th Dist.).
October 1, 2015
475 S.W.3d 111
trial court‘s summary judgment for Builders Bank and remand this case to the trial court for further proceedings.
James H. Leeland, Thomas Michael Ballases, Houston, TX, for appellee.
Panel consists of Justices Christopher, Donovan, and Wise.
OPINION
Tracy Christopher, Justice
In this action by a property owners’ association to enforce a restrictive covenant, the property owner challenges the summary judgment against it and the award of statutory damages for the property
I. BACKGROUND
Appellant KBG Investments, LLC owns a commercial tract in Greenspoint Subdivision, which is subject to a Declaration of Covenants, Conditions and Restrictions (“the Declaration“). Appellee Greenspoint Property Owners’ Association, Inc. (“Greenspoint“) administers and enforces the provisions of the Declaration. According to Greenspoint‘s petition, KBG sought and obtained permission from the Architectural Review Committee to paint the exterior of its building a certain color and to post at specified locations two “International Market Place” signs. Rather than acting on this approval, KBG painted its building an unapproved bright yellow color and erected two “Now Open” signs and two “International Flea Market” signs at non-approved locations.
Greenspoint sued for permanent injunctive relief requiring KBG to remedy the violations. In addition, Greenspoint sought declaratory relief that the lien it had placed on KBG‘s property to secure payment of attorneys’ fees, costs, and interest was valid. Finally, Greenspoint sought foreclosure of the lien and an award of statutory damages pursuant to
In two issues, KBG argues that the trial court erred in granting summary judgment and in awarding statutory damages.
II. SUMMARY JUDGMENT
A movant for traditional summary judgment has the burden of showing that there is no genuine issue of material fact and that it is entitled to judgment as a matter of law.
A. Condition Precedent
KBG first argues that the trial court erred in granting Greenspoint‘s motion for summary judgment because Greenspoint neither alleged nor proved that all conditions precedent had been performed or had occurred. The record does not support KBG‘s argument. Greenspoint alleged in its petition that “[a]ll conditions
B. Affirmative Defenses of Estoppel, Laches, Unclean Hands, and Waiver
KBG next contends that the summary judgment must be reversed because a review of the entire record in the light most favorable to KBG reveals that there are material issues of fact regarding KBG‘s affirmative defenses of estoppel, laches, unclean hands, and waiver. This argument, however, fails to take into consideration KBG‘s burden in response to the summary-judgment motion.
Any issues that a non-movant contends avoid summary judgment must be expressed in a written response or answer to the motion. See Sandhu v. Pinglia Invs. of Tex., L.L.C., No. 14-08-00184-CV, 2009 WL 1795032, at *6 (Tex. App.—Houston [14th Dist.] June 25, 2009, pet. denied) (mem.op.). Such issues include any affirmative defenses that the nonmovant contends are sufficient to defeat summary judgment. See Clear Creek Basin Auth., 589 S.W.2d at 678 (“[T]he nonmovant must expressly present to the trial court any reasons seeking to avoid movant‘s entitlement [to summary judgment], such as those set out in rules 93 and 94....“); Sharma v. Vinmar Int‘l, Ltd., 231 S.W.3d 405, 421-22 (Tex. App.—Houston [14th Dist.] 2007, no pet.) (characterizing the unclean-hands doctrine as an affirmative defense);
The affirmative defenses of estoppel, laches, and unclean hands are not mentioned in KBG‘s summary-judgment response. Thus, we cannot consider these as grounds for reversal.
Waiver is mentioned in KBG‘s summary-judgment response only in the conclusory sentence, “Only after the Plaintiff had effectively waived all its rights as to the Defendant‘s actions, did the Plaintiff start making its assertions and demands.” KBG did not state the factual basis for its conclusion that Greenspoint had waived all of its rights before ever making an assertion or a demand. KBG neither referred to any law, nor cited any evidence.
Even assuming, without deciding, that this bare assertion was sufficient to raise the issue of whether summary judgment was precluded by the affirmative defense of waiver, KBG still was required to offer summary-judgment proof of each element of the defense. See Richardson v. Office Bldgs. of Hous., 704 S.W.2d 373, 376 (Tex. App.—Houston [14th Dist.] 1985, no writ) (citing Seale v. Nichols, 505 S.W.2d 251, 254 (Tex. 1974)). “The elements of waiver include (1) an existing right, benefit, or advantage held by a party; (2) the party‘s actual knowledge of its existence; and (3) the party‘s actual intent to relinquish the right, or intentional conduct inconsistent with the right.” Ulico Cas. Co. v. Allied Pilots Ass‘n, 262 S.W.3d 773, 778 (Tex. 2008) (citing Tenneco Inc. v. Enter. Prods. Co., 925 S.W.2d 640, 643 (Tex. 1996)). In its response to the summary-judgment
On appeal, it appears to be KBG‘s position that Greenspoint‘s right to object to KBG‘s paint and signs or to sue for KBG‘s violation of the restrictive covenant was waived pursuant to Article V, Section 1 of the Declarations That section provides that no additions or improvements shall be erected or placed on the property “until the construction plans and specifications including ... colors [and] ... signs ... have been submitted to and approved in writing by the Architectural Review Committee....” If the Architectural Review Committee “fails to approve or disapprove such plans and specifications within thirty (30) days after the receipt thereof, they shall be deemed to be approved....”
KBG does not dispute Greenspoint‘s uncontroverted evidence that KBG sought and obtained approval to paint the building a certain color and to post two “International Market Place” signs in designated locations, and that KBG instead painted the building an unapproved color and erected four unapproved signs at other locations. KBG instead argues that the affidavit of Gurminder Singh, attached to its summary-judgment response, raised a genuine issue of material fact about whether Greenspoint failed to timely respond to a written request for approval of these modifications. KBG contends that by failing to timely respond to the modification request, Greenspoint tacitly approved KBG‘s current paint and signage choices and waived its right to an injunction requiring KBG to repaint its building and remove its current signs. Specifically, Singh attested that after he was told that the building‘s color was unacceptable, he met with Greenspoint‘s Board of Trustees in February 2012. Singh states that he asked the Board to “consider allowing me to maintain the color,” and that the Board asked him “to write an explanation letter.” Singh says that he also asked “to be allowed to change my signs,” and that he “was told then to put it in writing.” According to Singh, he sent the letter in March 2012, but the Board “was unresponsive.” In addition, Singh stated that after receiving a letter from Greenspoint‘s attorney in June 2012, he contacted the attorney and asked “that they reconsider their complaint.” Singh says, “I was told to send a letter to the attorney and that they would present it. Again, I heard nothing for an extended period of time.”
We disagree that Singh‘s affidavit constitutes evidence sufficient to raise a genuine issue of material fact about whether Greenspoint waived its right to enforce the Declaration by failing to timely respond to a written request made pursuant to Article V, Section 1. Under the terms of that section, Greenspoint‘s duty to timely approve or disapprove a property owner‘s paint and signage choices is triggered by the Architectural Review Committee‘s “receipt” of the property owner‘s “plans and specifications.” There is no evidence that Singh‘s March 2012 letter contained the “plans and specifications” required under Article V, Section 1, or that it was received by the Architectural Review Committee. Although Singh also attested that he was told to send a letter to Greenspoint‘s attorney sometime in or after June 2012, there is no evidence that he did so.
Because there is legally insufficient evidence that Greenspoint‘s Architectural Review Committee received “plans and specifications” concerning KBG‘s current paint and sign choices as required by Article V, Section 1 of the Declaration, there is no evidence that Greenspoint failed to timely approve or disapprove such plans and specifications. We accordingly overrule KBG‘s first issue.
Both our court and our sister court have concluded that these civil damages are punitive damages. “Damages assessed under section 202.004(c) of the Property Code are unrelated to the type or extent of injury or harm.” Sanchez, 367 S.W.3d at 436. As such, they are “punitive rather than compensatory.” Id. (citing Uptegraph v. Sandalwood Civic Club, 312 S.W.3d 918, 937 (Tex. App.—Houston [1st Dist.] 2010, no pet.)).
KBG argues that because such damages are “punitive rather than compensatory,” see id. they constitute “exemplary damages” under
In response, Greenspoint points out that our sister court has held that
An analogous question was presented—but not answered—in Flores v. Millennium Interests, Ltd., 185 S.W.3d 427 (Tex. 2005), a case addressing questions certified to the court by the Fifth Circuit Court of Appeals. In Flores, the Texas Supreme Court concluded that a “liquidated damages” provision in
The Fifth Circuit has once again certified a similar issue to the Texas Supreme Court in connection with another statute that provides for a civil penalty without any actual damages: the
1. Whether an action for a “civil penalty” under the Texas Optometry Act is an “action in which a claimant seeks damages relating to a cause of action” within the meaning of Chapter 41 of the Texas Civil Practice and Remedies Code. In other words, are civil penalties awarded under
Tex. Occ. Code § 351.605 “damages” as that term is used inTex. Civ. Prac. & Rem. Code § 41.002(a) .2. If civil penalties awarded under the Texas Optometry Act are “damages” as that term is used in
Tex. Civ. Prac. & Rem. Code § 41.002(a) , whether they are “exemplary damages” such thatTex. Civ. Prac. & Rem. Code § 41.004(a) precludes their recovery in any case where a plaintiff does not receive damages other than nominal damages.
Forte v. Wal-Mart Stores, Inc., 780 F.3d 272, 283 (5th Cir. 2015). These are similar to the two questions that we must answer in this appeal, but under a different statute. We stress, however, that we are not called upon to construe Chapter 41 in a general sense; we instead determine only the effect of Chapter 41 on
Greenspoint argues that the claims arising from KBG‘s violation of restrictive covenants are not governed by Chapter 41 because (1) Greenspoint did not seek “damages,” as that term is used in the provision identifying Chapter 41‘s scope; (2) unlike section 202.004, Chapter 41 makes proof of fraud, malice or gross negligence a prerequisite to an award of exemplary damages; (3) section 202.004 provides a lower maximum amount of damages; and (4) if applied to section 202.004, Chapter 41 would nullify such claims for civil damages. We examine each in turn.
1. Chapter 41‘s scope
Greenspoint argues that statutory damages under section 202.004 fall outside of Chapter 41‘s scope, because Chapter 41 “applies to any action in which a claimant seeks damages relating to a cause of action.” See
We can test this assumption by examining the legislature‘s use of the word “damages” within this same provision. See City of Lorena v. BMTP Holdings, L.P., 409 S.W.3d 634, 643 (Tex. 2013) (“We construe statutes to provide consistent meaning to the same word used throughout a statute.” (citing Needham, 82 S.W.3d at 318)). The legislature used the word “damages” four times in the first three sentences of
To determine whether the legislature used the word “damages” in the first sentence of
This chapter establishes the maximum damages that may be awarded in an action subject to this chapter, including an action for which damages are awarded under another law of this state. This chapter does not apply to the extent another law establishes a lower maximum amount of damages for a particular claim.
We know, however, that “damages” is not used in
2. Chapter 41‘s requirement of proof of fraud, malice, or gross negligence
As a further argument that Chapter 41 does not apply to the civil damages awarded here, Greenspoint points out that
3. Scope of Chapter 41‘s exception for claims with lower damage limits
Greenspoint also contends that Chapter 41 does not apply to claims for civil damages under the Property Code because
to
It is incorrect to say that the entirety of Chapter 41 is inapplicable if another law establishes a lower amount of damages that could be awarded. The exception instead provides that Chapter 41 “does not apply to the extent another law establishes a lower maximum amount of damages for a particular claim.”
4. Effect of applying Chapter 41 to section 202.004
Greenspoint additionally argues that, because Chapter 41 precludes an award of penalty damages in the absence of actual damages, we would impermissibly nullify the civil-damages provision of
Contrary to Greenspoint‘s position, the remedies of actual damages for past harm and injunctive relief to prevent future harm are not necessarily mutually exclusive. See, e.g., Noell v. City of Carrollton, 431 S.W.3d 682, 712 (Tex. App.—Dallas 2014, pet. denied) (“[A] court may properly grant injunctive relief to stop a wrong and remedy it, and award past damages to the6 age claims. Compare
injured party for
It is not difficult to imagine a situation in which both damages and injunctive relief are available. For example, the Declarations in this case provide that “[n]o use shall be permitted which is offensive by reason of odor ... or pollution,” a situation that is analogous to a trespass to land. The property owner instead is required to maintain the property in a “safe, clean and attractive condition at all times.” If the owner does not, then Greenspoint can have such maintenance performed, “and the Owner or lessee shall be liable for the cost thereof.”7 Thus, if a property owner violated these maintenance-and-use provisions and refused to cure them, then Greenspoint could do so, and the reasonable amounts it expended to perform necessary maintenance would be evidence of the existence and amount of its actual compensatory damages. Faced with repeated violations, Greenspoint additionally could seek injunctive relief, such as that available in a trespass action. Cf. City of Arlington v. City of Fort Worth, 873 S.W.2d 765, 769 (Tex. App.—Fort Worth 1994, writ dism‘d w.o.j.) (“[I]njunction is the proper remedy to restrain repeated or continuing trespasses where the ‘remedy at law is inadequate because of the nature of the injury, or the multiplicity of actions necessary to obtain redress.‘“).
Finally, as the Texas Supreme Court has stated, the “prime canon” of statutory construction is that “we construe statutes by first looking to the statutory language for the Legislature‘s intent, and only if we cannot discern legislative intent in the language of the statute itself do we resort to canons of construction or other aids.” Tex. Lottery Comm‘n v. First State Bank of DeQueen, 325 S.W.3d 628, 639 (Tex. 2010) (citing City of Rockwall v. Hughes, 246 S.W.3d 621, 626 (Tex. 2008)). Where a statute‘s unambiguous language discloses the legislature‘s intent that the statute will prevail to the extent that it conflicts with another law, we must give effect to that language. See id. Here, the legislature has stated unambiguously that, with certain exceptions inapplicable here, “the provisions of [Chapter 41] prevail over all other law to the extent of any conflict.”
We therefore conclude that Chapter 41 applies.
B. Are the civil damages under section 202.004(c) of the Texas Property Code exemplary damages under Chapter 41?
Chapter 41 defines exemplary damages as “any damages awarded as a penalty or by way of punishment but not for compensatory purposes.... ‘Exemplary damages’ includes punitive damages.” See
In arguing to the contrary, Greenspoint likens its claim for violation of a restrictive covenant to a claim for breach of contract. According to Greenspoint, it would be nonsensical to treat the statutory civil damages at issue here as exemplary damages because exemplary damages are not available for a breach of contract. In other words, Greenspoint argues that it is nonsensical to construe the statute as provid8ing for an award of damages that would not have been available for a common-law breach-of-contract claim. We have rejected that interpretation, concluding instead that “[d]amages assessed under section 202.004 of the Property Code are unrelated to the type or extent of injury or harm caused by the violation.” Sanchez, 367 S.W.3d at 436. Thus, we already have construed
Greenspoint also attempts to distinguish civil damages under
Chapter 41 is broad in scope, and with certain limited exceptions that are inapplicable here, its provisions “prevail over all other law to the extent of any conflict.”
IV. CONCLUSION
We conclude that Greenspoint carried its burden to establish that KBG violated the restrictive covenant by painting the exterior of its building an unapproved color and by posting unapproved signs. The burden therefore shifted to KBG to introduce evidence sufficient to raise a genuine issue of material fact precluding summary judgment. Because KBG failed to meet that burden, we affirm the portion of the judgment granting Greenspoint permanent injunctive relief.
We further conclude that statutory “civil damages” under
We accordingly modify the trial court‘s judgment to eliminate the award of statutory damages, and affirm the judgment as modified.10