Opinion by Chief Justice Morriss.
For at least the last twenty-four years, the five-acre tract at the southeast corner of Interstate Highway 20 and Texas Highway 43 in Harrison County, on which was once located a business known as Moseley's Truck Stop, has been unimproved property. But, back in 1985, when the five-acre tract and its personal property had been sold as a package by Douglas B. Moseley for a price of almost $1 million, it had hosted the truck stop. As part of the sale,
Moseley contends that Arnold lacks standing to enforce the restrictive covenant. He does not dispute in this Court that the restrictive covenant is a covenant that runs with the land.
In re Estate of Hardesty, 449 S.W.3d 895, 903 (Tex.App.-Texarkana 2014, no pet.). In suits over restrictive covenants, "a person has standing to enforce the restriction only on showing that the restriction was intended to inure to his or her benefit." Country Comm. Timberlake Village, L.P. v. HMW Spec. Util. Dist., 438 S.W.3d 661, 667 (Tex.App.-Houston [1st Dist.] 2014, pet. denied) (citing Calvary Temple v. Taylor, 288 S.W.2d 868, 870 (Tex.Civ.App.-Galveston 1956, no writ)).
Generally, a restrictive covenant may be enforced only by the parties to the
We construe restrictive covenants using the general rules of contract construction. See Pilarcik v. Emmons, 966 S.W.2d 474, 478 (Tex.1998). "Whether restrictive covenants are ambiguous is a question of law. Courts must examine the covenants as a whole in light of the circumstances present when the parties entered the agreement." Id. (citing Grain Dealers Mut. Ins. Co. v. McKee, 943 S.W.2d 455, 458 (Tex.1997); Columbia Gas Transmission Corp. v. New Ulm Gas, Ltd., 940 S.W.2d 587, 589 (Tex.1996)). Restrictive covenants "are `unambiguous as a matter of law if [they] can be given a definite or certain legal meaning.'" Id. (quoting Grain Dealers, 943 S.W.2d at 458). If we find there is no ambiguity, we "must determine the intent from the language used in the document." Silver Spur Addition Homeowners v. Clarksville Seniors Apartments, 848 S.W.2d 772, 774 (Tex.App.-Texarkana 1993, writ denied). Our primary purpose "is to ascertain and give effect to the true intention of the parties as expressed in the instruments." Ski Masters of Tex. LLC v. Heinemeyer, 269 S.W.3d 662, 667 (Tex.App.-San Antonio 2008, no pet.) (citing Owens v. Ousey, 241 S.W.3d 124, 129 (Tex.App.-Austin 2007, pet. denied)). However, if a restrictive covenant is "susceptible to more than one reasonable interpretation, [it is] ambiguous." Pilarcik, 966 S.W.2d at 478. If the restrictive covenant is susceptible to two or more reasonable interpretations, then it "creates a fact issue as to the parties' intent." TX Far W., Ltd. v. Tex. Invs. Mgmt., Inc., 127 S.W.3d 295, 302 (Tex. App.-Austin 2004, no pet.) (citing Columbia Gas Transmission Corp., 940 S.W.2d at 589). "In construing the intent, a court is not to concern itself with the merits of restrictions because the parties to the restrictions had a right to adopt any type of restrictions they chose." Id.
The operative clause of the restrictive covenant agreement contains three clauses relevant to determining the parties' intent regarding its intended beneficiaries. First, it states that the purpose of the restrictive covenant is to benefit the Gormans, their successors and assigns. Second, it provides that the restrictive covenant is given "to protect the value and desirability of" the five-acre tract being purchased by the Gormans. Finally, the operative clause expresses the parties' intent that the restrictive covenant run with
Since Arnold established that she has standing to enforce the restrictive covenant and Moseley conceded that it ran with the land, the trial court's granting of Arnold's motion for partial summary judgment would be proper unless Moseley produced sufficient evidence to raise a fact issue on each element of his defense of changed conditions. See Brownlee v. Brownlee, 665 S.W.2d 111, 112 (Tex.1984). Texas courts have long recognized that "[a] court may refuse to enforce a restrictive covenant if there has been such a change of conditions that it is no longer possible to secure in a substantial degree the benefits sought to be realized through the covenant." TX Far W., Ltd., 127 S.W.3d at 306-07 (citing Cowling v. Colligan, 158 Tex. 458, 312 S.W.2d 943, 945 (1958); Dempsey v. Apache Shores Prop. Owners Ass'n, 737 S.W.2d 589, 597 (Tex. App.-Austin 1987, no writ)). In other words, "where the reason for enforcing a restrictive covenant has ceased, equity will no longer enforce the covenant." La Rocca v. Howard-Reed Oil Co., 277 S.W.2d 769, 772 (Tex.Civ.App.-Beaumont 1955, no writ). Further, when the conditions have sufficiently changed, it may bring about a termination of the restrictive covenant. Overton v. Ragland, 54 S.W.2d 240, 242-43 (Tex.Civ.App.-Amarillo 1932, writ dism'd). Generally, determining whether conditions have changed to the degree that justifies the non-enforcement, or termination, of a restrictive covenant is a fact question. See TX Far W., Ltd., 127 S.W.3d at 308; Overton, 54 S.W.2d at 242-43.
To be entitled to summary judgment, the movant must establish "that there are no genuine issues of material fact and that it is entitled to judgment as a matter of law." Hardesty, 449 S.W.3d at 903. We review de novo the trial court's granting of a summary judgment. Mann Frankfort Stein & Lipp Advisors, Inc. v. Fielding, 289 S.W.3d 844, 848 (Tex.2009). When reviewing a traditional summary judgment, "we take as true all evidence favorable to the nonmovant and indulge every reasonable inference and resolve any
A no-evidence summary judgment motion asserts that there is no evidence of one or more essential element of a claim or defense on which the non-movant has the burden of proof at trial. Crocker v. Babcock, 448 S.W.3d 159, 163 (Tex.App.-Texarkana 2014, pet. denied); see TEX. R. CIV. P. 166a(i). To defeat the motion, the non-movant must "present more than a scintilla of probative evidence on each element of his or her claim." Id. "More than a scintilla of evidence exists when the evidence rises to a level that would enable reasonable and fair-minded people to differ in their conclusions." Id. (citing Merrell Dow Pharms., Inc. v. Havner, 953 S.W.2d 706, 711 (Tex.1997)). When a party asserts both a traditional and a no-evidence summary judgment motion, we review the judgment first under the no-evidence standard. Domingo v. Mitchell, 257 S.W.3d 34, 39 (Tex.App.-Amarillo 2008, pet. denied). If the non-movant has failed to present more than a scintilla of evidence on each element of his claim, no traditional summary judgment review is required. Id. (citing Ford Motor Co. v. Ridgway, 135 S.W.3d 598, 600 (Tex.2004)).
Moseley contends that the trial court erred in granting partial summary judgment because genuine issues of material fact exist regarding his claim of changed conditions. Moseley argued at trial and argues in this Court that the restrictive covenant was granted within the context of the purchase and sale of the truck stop as a going concern. Within this context, the original purpose of the restrictive covenant, he argues, was to protect the value of the truck stop. In support of this argument, he points to the contract of sale, that evidences the sale of the truck stop, and to his affidavit in which he avers that the Gormans' and his original intention was that the restrictive covenant protect the value of the truck stop. Since this was the original purpose of the restrictive covenant, he argues, the destruction and
Arnold admits that the Gormans purchased the five-acre tract with an existing and operational truck stop and that one of the negotiated terms of the contract of sale was for a restrictive covenant to be placed on the Retained Tract. Nevertheless, she argues that Moseley has failed to raise any issues of material fact, and alternatively, that there is no evidence, that shows changed conditions that would justify the non-enforcement of the restrictive covenant. She argues that none of the facts on which Moseley relies prevent her from securing the benefits of the restrictive covenant such that it defeats the purpose of the restrictions. Although she does not contest the underlying facts relied on by Moseley, she argues that none of the actions or inactions of the various owners of the five-acre tract prevents it from being used as a truck stop. Further, she argues that she derives a substantial benefit from the fact that she has no competition from the property across the street because of the restrictive covenant. Finally, she argues that the fact that she was able to prevent Moseley from selling the Retained Tract for use as a truck stop establishes the benefit of the restriction to the five-acre tract. Although her argument regarding the purpose of the restrictive covenant is not well-developed, her response assumes that the purpose of the restrictive covenant was to protect the value of the five-acre tract, as long as it is capable of supporting a truck stop.
Arnold relies heavily on Texas cases involving residential subdivisions having a general plan that applies a residential-only restriction to all lots in the subdivision. See, e.g., Cowling, 158 Tex. 458, 312. S.W.2d 943; Dempsey, 737 S.W.2d 589; 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.-San Antonio 1939, writ ref'd). In those cases, the courts stressed that the changed conditions must have occurred in the restricted area (i.e., the residential subdivision) or the surrounding area, and balanced the equities favoring the particular owner seeking to avoid the restrictive covenant against the equities favoring all of the other owners in the subdivision who purchased their lots in reliance on the residential restrictions. See, e.g., Cowling, 158 Tex. 458, 312 S.W.2d at 946. The courts are understandably cautious in granting non-enforcement of the residential-only restriction, since not enforcing the residential restriction as to some lots may adversely affect the value of all the remaining residential lots in the subdivision, and "the entire purpose and intention originally expressed to create a restricted residential [subdivision] could be thwarted." Scaling, 167 S.W.2d at 281. Nevertheless, even in those cases, when the conditions in the restricted area or the surrounding area have changed to such a degree that it defeats the purposes of the restrictive covenant, the restriction may be terminated. See Overton, 54 S.W.2d at 242-43.
In Overton, Ragland owned two lots bordering Broadway Street in Lubbock.
The gravamen of these changed-conditions cases is that, if the purpose of the restrictive covenant can no longer be realized in a substantial manner, the courts will terminate, or refuse to enforce, the restrictions. If the purpose of the restrictive covenant can no longer be realized at all, then, ipso facto, it is no longer possible to secure in a substantial degree the benefits sought to be realized through the covenant. Therefore, determining what the parties intended to be the purpose of the restrictive covenant is essential.
"A written contract must be construed to give effect to the parties' intent expressed in the text as understood in light of the facts and circumstances surrounding the contract's execution, subject to the parol evidence rule." Houston Exploration Co. v. Wellington Underwriting Agencies, Ltd., 352 S.W.3d 462, 469 (Tex.2011) (citing Sun Oil Co. (Delaware) v. Madeley, 626 S.W.2d 726, 731 (Tex. 1981)). Further, the parol evidence rule "does not prohibit consideration of surrounding circumstances that inform, rather than vary from or contradict, the contract text." Id. "Those circumstances include. . . `the commercial or other setting in which the contract was negotiated and other objectively determinable factors that give a context to the transaction between the parties.'" Id. (quoting 11 RICHARD A. LORD, WILLISTON ON CONTRACTS § 32.7 (4th ed.1999)).
"`Negotiations of the parties may have some relevance in ascertaining the dominant purpose and intent of the parties embodied in the contract interpreted as a whole.'" Id. at 469-70 (quoting Tanner Dev. Co. v. Ferguson, 561 S.W.2d 777, 781 (Tex.1977)). In considering the surrounding
In this case, the operative clause of the restrictive covenant agreement provides that the Retained Tract "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 the [Gormans]." (Emphasis added). Although this phrase expresses the parties' intent to benefit the five-acre tract, it does not, by itself, give us insight into the nature of the five-acre tract that makes it valuable and desirable. Without knowing the nature of the five-acre tract that the parties are trying to protect, we cannot know the purpose of the restrictive covenant. For instance, if the five-acre tract was to be the site of a residential subdivision, the purpose of the restrictive covenant forbidding the development of a fuel or truck stop on the Retained Tract would clearly be to preserve the value and desirability of the five-acre tract as residential property. In our case, the parties agree that the Gormans purchased the five-acre tract with an existing and operational truck stop and that one of the negotiated terms of the transaction was for a restrictive covenant to be placed on the Retained Tract. Knowing these circumstances informs us of the nature of the five-acre tract when purchased — commercial property containing an operational truck stop — and that the restrictive covenant was negotiated to protect the value and desirability of the property, at least as commercial property capable of supporting a truck stop, as Arnold argues, or perhaps, as Moseley argues, only so long as it is supporting an operational truck stop. Both of these are reasonable interpretations of the purpose of the restrictive covenant, based on the language in the operative clause and informed by the surrounding circumstances. Thus, the language of the operative clause is ambiguous. See TX Far W., Ltd., 127 S.W.3d at 302.
When the operative clause is ambiguous, we may "look at recitals to ascertain the intent of the parties in executing the contract." Universal Health Servs., Inc. v. Thompson, 63 S.W.3d 537, 543 (Tex.App.-Austin 2001), rev'd on other grounds by Universal Health Servs., Inc. v. Renaissance Women's Group, P.A., 121 S.W.3d 742 (Tex.2003). As we have seen above, the recital paragraphs refer to the contract of sale in which Moseley agreed to sell the five-acre tract to the Gormans and recites that the parties desire to fulfill the terms and provisions of the contract of sale. See infra Since the recital paragraphs direct us to the contract of sale, we may also consider this prior agreement to determine if it will aid in establishing what the parties intended. See RESTATEMENT (SECOND) OF CONTRACTS § 214 (1981) ("Agreements. . . prior to or contemporaneous with the adoption of a writing are admissible in evidence to establish . . . (c) the meaning of the writing, whether or not integrated."). As we have seen, the contract of sale shows that the sale of the five-acre tract included the sale of the then-existing and operating truck stop. See infra Included in the contract of sale was Moseley's agreement to restrict the Retained Tract "to preclude its development and use
Thus, after considering the language of the restrictive covenant, the surrounding circumstances, and the contract for sale, the different interpretations of the parties as to the purpose of the restrictive covenant remain reasonable. If a restrictive covenant is "susceptible to more than one reasonable interpretation, [it is] ambiguous." Pilarcik, 966 S.W.2 at 478. This, then creates a fact issue as to the purpose of the restrictive covenant intended by the original parties. See TX Far W., Ltd., 127 S.W.3d at 302. Therefore, we hold that, because the ambiguous language of the restrictive covenant cannot establish the purpose of the restrictive covenant intended by the original parties, a fact issue remains that precludes summary judgment.
Under either interpretation of the purpose of the restrictive covenant asserted by the parties, the summary judgment evidence, when viewed in the light most favorable to Moseley, shows there remains a fact question regarding whether there has been such a change in conditions that it is no longer possible to secure in a substantial degree the benefits sought to be realized through the covenant. The contract of sale shows that the purchase of the five-acre tract included the sale of the truck stop as a going concern, that it had a sales price of $971,500.00, and that Moseley promised to place the restrictive covenant on the Retained Tract as part of the terms of the sale. Moseley also submitted summary judgment evidence that the truck stop had burned down and that all of its buildings and underground fuel tanks had been removed, over twenty-four years ago. He also brought forth evidence that the five-acre tract had been sold at least four times since the destruction and removal of the truck stop and that none of subsequent owners had rebuilt a truck stop on the property. Although there was no evidence of the purchase price paid for the five-acre tract by any purchaser after the truck stop was destroyed, Moseley testified by affidavit that the five-acre tract is currently valued at $49,500.00 by the Harrison County Appraisal District. In contrast, Moseley was recently offered $850,000.00 for the Retained Tract in contemplation that it would be used for the development of a truck stop.
Arnold sought to counter this evidence in her affidavit in support of her motion for partial summary judgment by attesting, "The Restrictive Covenant makes my five (5) acre tract or parcel of land more valuable as a result of having no competition for a truck and fuel stop directly across Interstate 20." Of course, this is her opinion and falls short of conclusive proof of that fact. Viewing the evidence in the light most favorable to Moseley, the
Since issues of fact remain regarding (1) the purpose of the restrictive covenant intended by the original parties, and (2) whether there has been such a change of conditions that it is no longer possible to secure in a substantial degree the benefits sought to be realized through the covenant, we find that the trial court erred in granting partial summary judgment, and final judgment, in favor of Arnold.
We reverse the judgment of the trial court and remand this case to the trial court for further proceedings consistent with this opinion.
It is undisputed that this referenced five-acre tract of land is the same five-acre tract conveyed to the Gormans. The restrictive covenant agreement does not describe the five-acre tract, but only references the contract of sale. The copy of the contract of sale in evidence indicates that the five-acre tract is described in an annexed Exhibit A; however, no Exhibit A is attached to the copy. The restrictive covenant agreement provides:
(Emphasis added). The contract of sale recited a purchase price of $971,500.00. The contract of sale also provided that included in the sale of the five-acre tract was all the equipment, fixtures, personal property, inventory, security deposits, and insurance policies associated with the Truck Stop. In the contract of sale, Moseley also represented that the financial statements of the Truck Stop are accurate and that he has made all business records pertaining to the Truck Stop available for the Gormans' audit. Moseley also agreed to license the name of "Moseley" to the Gormans "for use only in connection with the truck stop business on the property to be conveyed." In addition, Moseley agreed to place a restriction on the 6.379-acre tract to preclude its use as a truck stop.
In his petition for declaratory judgment, Moseley asked the trial court to declare the restrictive covenant unenforceable, alleging, inter alia, that Arnold lacks standing to enforce the restrictive covenant and that changed conditions entitle him to a judgment declaring the restrictive covenant unenforceable. In his motion for partial summary judgment, Moseley asserted that the restrictive covenant was unenforceable because (1) there is no vertical privity of estate between the Gormans and Arnold, and (2) the closure of the truck stop, and the failure of subsequent owners to reopen the truck stop, constitute changed circumstances entitling him to cancellation of the restrictive covenant. Moseley also asserted that the Gormans' and the subsequent owners' failure to give him notice when they intended to sell the property violated his first right of refusal contained in his contract for sale with the Gormans. He contended that this was a material breach of both the contract for sale and the restrictive covenant agreement that makes the restrictive covenant unenforceable. As we note hereafter, Moseley has waived any error related to this ground of his motion for partial summary judgment. See infra note 5. Even if he had not waived this error, his right of first refusal contained in the unrecorded contract for sale was void as to subsequent purchasers for value without notice. See TEX. PROP. CODE ANN. § 13.001(a) (West 2014). The summary judgment evidence established that the five-acre tract had been conveyed by deed four times to subsequent purchasers. Each of these deeds recites that the conveyance was for valuable consideration. Moseley admitted that these conveyances were purchases and did not contend that any of the subsequent purchasers had notice of his right of first refusal.
However, Moseley only presents arguments with citation to authorities for his issues relating to standing and changed conditions as those issues relate to the propriety of the trial court granting Arnold's motion for partial summary judgment. The Texas Rules of Appellate Procedure require an appellant to present "a clear and concise argument for the contentions made, with appropriate citations to authorities and to the record." TEX. R. APP. P. 38.1(i); In re Estate of Curtis, 465 S.W.3d 357, 379 (Tex.App.-Texarkana 2015, pet. dism'd). "`Bare assertions of error, without argument or authority, waive error.'" Curtis, 465 S.W.3d at 379 (quoting McKellar v. Cervantes, 367 S.W.3d 478, 484 n. 5 (Tex.App.-Texarkana 2012, no pet.)). Since Moseley has not made argument with appropriate citation to authority on his four other issues, they are waived, except insofar as the issues of standing and changed circumstances impact the propriety of the granting of Arnold's motion for partial summary judgment and the entry of final judgment in her favor. See Strather v. Dolgencorp of Tex., Inc., 96 S.W.3d 420, 424-25 (Tex.App.-Texarkana 2002, no pet.) (holding that issues stated generally must be read in context of brief as whole and what actually argued in brief; any issues not argued are waived.)