Thursday, June 19, 2008

Rule against perpetuities not violated

Houston Court of Appeals considers whether a homeowners' association's right to levy maintenance-fee assessments and to foreclose on a real property lien based upon a members' failure to pay such assessments violates the rule against perpetuities. The court's answer is NO.

Supkins v. Madison Place Homeowners Ass'n
No.01-07-00573-CV (Tex.App.- Houston [1st Dist.] June 19, 2008)(Radack) (homeowner's law, rule against perpetuities not violated)
Opinion by Chief Justice Radack
Panel members: Chief Justice Radack, Justices Jennings and Bland
Case style: James L. Supkis v. Madison Place Homeowners Association, Inc.
Appeal from 133rd District Court of Harris County
Trial Court Judge: Hon. Lamar McCorkle
Disposition: Trial Court's judgment affirmed

MEMORANDUM OPINION [EXCERPT]

B. Rule Against Perpetuities

The Texas Constitution states that "[p]erpetuities . . . are contrary to the genius of a free government, and shall never be allowed." Tex. Const. art. I, § 26. Texas courts have enforced this provision by applying the common-law rule against perpetuities. Mattern v. Herzog, 367 S.W.2d 312, 314 (Tex. 1963).

Under the rule, an interest is not valid unless it must vest, if at all, within 21 years after the death of some life or lives in being at the time of the conveyance. Peveto v. Starkey, 645 S.W.2d 770, 772 (Tex. 1982).

Supkis argues that the Declaration is "constitutionally void" because it "attempts to create real property interests, including unknown and contingent assessments, and liens, that may continue indefinitely." Specifically, Supkis contends that the Declaration violates the rule against perpetuities because, after its initial 20-year term, it can be "automatically extended" in 10-year increments.

We disagree.

In State v. Reece, 374 S.W.2d 686 (Tex. Civ. App.--Houston 1964, no writ), the purchaser of the property bought land subject to a restriction that it be used only for residential purposes. Id. at 688. The restriction instrument provided that the restriction was to "remain in full force and effect perpetually" unless, after the expiration of 15 years, 75% of the lot owners vote to change the restrictions. Id. The purchaser of the property argued that the restriction violated the rule against perpetuties. Id. This court held that, "the restrictions, being covenants running with the land, although described as perpetual, are not in violation of the rule against perpetuities which, in the final analysis, is merely a rule against the too remote vesting of the title to real property." Id. We noted that, as a covenant running with the land, the interests created by the restrictions passed with the conveyance of the title to the property and vested immediately as the title to the property vested. Id. (citing Butler v. Southwest Dairy Products Co., 146 S.W.2d 1036 (Tex. Civ. App.--Galveston 1941, writ dism'd)). As such, the rule against perpetuities was not implicated. In Cornett v. City of Houston, 404 S.W.2d 602, 604 (Tex. Civ. App.--Houston 1966, no writ), the purchaser of the property wanted to open a liquor store, but the restrictions on file in the county deed records limited use of the property to residential purposes only. The document containing the restriction provided that it was valid for a term of 25 years to be automatically extended for successive 15 year periods. Id. at 605. This Court, citing State v. Reece, held that "[t]he covenants and restrictions do not violate the rule against perpetuitites because that rule merely relates to the remote vesting of an estate." Id.From Reece and Cornett, we conclude that a restriction on property that runs with the land does not implicate the rule of perpetuities if it does not remotely vest a property interest.

Thus, the issue we decide next is whether the covenant to pay fee assessments, found in the Declaration, is a covenant running with the land that implicates remote vesting of an interest in the property.

A covenant runs with the land when it touches and concerns the land; relates to a thing in existence or specifically binds the parties and their assigns; is intended by the original parties to run with the land; and the successor to the burden has notice. Inwood N. Homeowners' Ass'n v Harris, 736 S.W.2d 632, 635 (Tex. 1987); Westland Oil Dev. Corp. v. Gulf Oil Corp., 637 S.W.2d 903, 910-11 (Tex. 1982).In Inwood North Homeowners' Association, a declaration of covenants and restrictions for the subdivision, which was on file in the county's real property records, provided that any person receiving a deed for a lot in the subdivision was to pay an annual assessment and any special assessments for capital improvements. 736 S.W.2d at 633. The court held that the covenant to pay maintenance assessments for the purpose of repairing and improving the common areas and recreational facilities of the subdivision met all of the requirements for a covenant running with the land because (1) it "touched and concerned" the land, (2) the declaration of covenants evidenced the intent of the original parties that the covenant run with the land, (3) the covenant specifically bound the parties and their successors and assigns, and (4) because the property was conveyed in a succession of fee simple estates, the requirement of privity was met. Id. at 635.The same is true of the covenant to pay maintenance fees and assessments in this case. The purpose of the fee assessment in this case is to "be used exclusively for the purpose of promoting the recreation, health, safety, and welfare of the Owners and in particular for improvement and maintenance of the property, the Common Areas, and services and facilities relating to the use and enjoyment and of the Townhouses and other improvements new or hereafter situated thereon . . . ." As such, the fee-assessment provision "touches and concerns the land." Id. at 635. Here, the declaration also provides, in both the enabling paragragh and in Article X, that the covenants and restrictions shall run with the real property and be binding on all parties acquiring the property and their heirs, successors, and assigns. As such, the fee-assessment provision meets the requirements that it be intended to run with the land and be binding on the parties and their assigns. Id. Finally, the deed signed by Supkis referenced the declaration; he was thus on constructive notice of its restrictive covenants. See id. As such, the requirement that he have notice of the burden has been met. Id.Therefore, under the reasoning of Inwood North Homeowners' Association, we conclude that the requirement that homeowners in Madison Place pay maintenance fee assessments is a covenant running with the land. Moreover, the assessment burden vests upon transfer of the property and thus does not implicate the rule against perpetuities because it does not involve the remote vesting of a real property interest. See Cornett, 404 S.W.2d at 605; Reece, 374 S.W.2d at 688.Our holding today is consistent with the holdings of other jurisdictions that covenants to pay fee assessments do not violate the rule against perpetuities because they burden a present, not a future, interest in property. See In re County Treasurer & Ex Officio County Collector, 869 N.E.2d 1065, 1086-87 (Ill. App. Ct. 2007) (holding that declaration created present interest in collecting assessments on all lots in development and that covenant of assessments is present interest and does not violate rule against perpetuities); Kell v. Bella Vista Prop. Owners Ass'n, 528 S.W.2d 651, 653 (Ark. 1975) (holding that assessment covenant, which provided for initial term of 26 years followed by successive 10-year periods, not an illegal perpetuity because nothing prevents property from vesting); Lowry v. Norris Lake Shores Dev. Corp., 203 S.E.2d 171, 172-73 (Ga. 1974) (holding that annual fee assessment for beach privileges is covenant running with land and does not violate rule against perpetuities).C. Lien is Enforcement Mechanism for Covenant Running with the LandHaving decided that the fee-assessment provision of the Declaration is a covenant running with the land and does not violate the rule against perpetuities, we consider whether the lien to enforce the fee assessment presents a violation of the rule. In Inwood North Homeowner's Association, after holding that a fee assessment was a covenant running with the land, this Court further held that the restrictions contained "valid contractual liens which run with the land," and that the homeowners took the property subject to the homeowners' associations's right to foreclose for delinquent assessments. 736 S.W.2d at 635-36. This Court held that this right to foreclose was superior to the landowner's homestead rights because it pre-existed the landowner's purchase of the property. Id.The same is true in this case. The Homeowners' Associations's right to foreclose its lien for non-payment of fee assessments is specifically provided for in the Declaration. According to Inwood North Homeowner's Association, this lien right also runs with the land, id. at 635, and Supkis took title to his property subject to such right. The foreclosure right is the enforcement mechanism for the homeowner's assessments, burdens which are immediately vested upon transfer of the property. Thus, the right of foreclosure cannot result in a remote or contingent vesting interest, and as the provision which it enforces does not violate the rule against perpetuities, neither does it.III.

CONCLUSION

The fees assessment provision is a covenant running with the land that does not remotely vest any property interest and thus, does not violate the rule against perpetuities. Accordingly, we overrule Supkis's first and second issues. We affirm the judgment of the trial court.

Inmate's suit against his appointed lawyer revived

First Court of Appeals, in opinion by Chief Justice Radack, rules that prisoner's suit against his appointed counsel was improperly dismissed pursuant to a no-evidence motion for summary judgment. Defendant's claim that he was not a public employee was not relevant to the elements of plaintiff's cause of action in the summary judgment proceeding. Immunity issues - which might provide a valid basis for dismissal - were not before the court.

Poledore v. Fraley No. 01-07-00583-CV (Tex.App.- Houston [1st Dist.] June 19, 2008)(Radack) (TTCA, prisoner suit against appointed attorney for malpractice, no-evidence motion for summary judgment reversed)
Opinion by Chief Justice Radack
Panel: Before Chief Justice Radack, Justices Keyes and Hanks
Full case style: Dennis James Poledore, Jr. v. Frank J. Fraley
Appeal from 268th District Court of Fort Bend County
Trial Court Judge: Hon. Brady G. Elliott
Disposition: Trial court judgment reversed, case remanded for further proceedings

MEMORANDUM OPINION

Appellant, Dennis James Poledore, Jr., appeals the trial court's granting of a no-evidence summary judgment in favor of appellee, Frank Jerome Fraley. We reverse and remand.

BACKGROUND

Poledore, an inmate in the Texas Department of Corrections--Institutional Division, filed a civil suit against Fraley, the court-appointed attorney who represented him in his criminal case, alleging that Fraley had (1) committed forgery by amending a waiver of arraignment document that Poledore had previously signed, and (2) failed to hire a private investigator to work on Poledore's case. Poledore's petition alleged that it was a "Tort Civil Action at Law for Damages" and that jurisdiction was "invoked by the Texas Tort Claims Act." By way of the suit, Poledore sought to recover $50,000 in monetary damages from Fraley.

Fraley filed a no-evidence motion for summary judgment alleging that there was "no evidence of one or more of the following elements of Tort Claim." Specifically, Fraley claimed that Poledore had not produced any evidence that Fraley was an "employee" as that term is defined by the Tort Claims Act. See Tex. Civ. Prac. & Rem. Code Ann. § 101.001(2) (Vernon 2005). The trial court granted Fraley's motion.

PROPRIETY OF NO-EVIDENCE SUMMARY JUDGMENT

In his sole issue on appeal, Poledore contends the trial court erred in granting Fraley's no-evidence motion for summary judgment.
Standard of Review

To prevail on a no-evidence summary judgment motion, a movant must allege that there is no evidence of an essential element of the adverse party's cause of action. Tex. R. Civ. P. 166a(i); Fort Worth Osteopathic Hosp., Inc. v. Reese, 148 S.W.3d 94, 99 (Tex. 2004). We review a no-evidence summary judgment under the same legal sufficiency standard used to review a directed verdict. Boaz v. Boaz, 221 S.W.3d 126, 130 (Tex. App.--Houston [1st Dist.] 2006, no pet.). Although the non-movant need not marshal its proof, it must present evidence that raises a genuine issue of material fact on each of the challenged elements. Tex. R. Civ. P. 166a(i); Ford Motor Co. v. Ridgway, 135 S.W.3d 598, 600 (Tex. 2004). A no-evidence summary judgment motion may not properly be granted if the non-movant brings forth more than a scintilla of evidence to raise a genuine issue of material fact on the challenged elements. See Ridgway, 135 S.W.3d at 600. 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." Merrell Dow Pharms., Inc. v. Havner, 953 S.W.2d 706, 711 (Tex. 1997).

Analysis

In his motion for no-evidence summary judgment, Fraley argued that Poledore had no evidence to prove an "element" of his claim under the Texas Tort Claims Act. Specifically, Fraley argued that there was no evidence that he was an "employee" of a governmental unit, and that he was, instead, an independent contractor.

"[T]he Tort Claims Act does not create a cause of action; it merely waives sovereign immunity as a bar to a suit that would otherwise exist." City of Tyler v. Likes, 962 S.W.2d 489, 494 (Tex. 1997); see also City of Houston v. Boyle, 148 S.W.3d 171, 179 (Tex. App--Houston [1st Dist] 2004, no pet.) ("The TCA does not create a cause of action, but merely establishes a waiver of governmental immunity.").

As such, Poledore's failure to prove that Fraley is an employee of a governmental unit means that Poledore has not established a waiver of sovereign immunity.

However, no party has claimed immunity in this case, and Poledore is not seeking to hold a governmental unit responsible for Fraley's actions. Quite simply, sovereign immunity and the application of the Tort Claims Act are not issues in this case.

Because the Tort Claims Act does not create a cause of action, whether Fraley is an "employee" of a governmental unit is not an "element" of Poledore's cause of action. (1) Fraley's no-evidence motion for summary judgment does not attack an essential element of Poledore's cause of action, thus the trial court erred in granting summary judgment in Fraley's favor.

CONCLUSION

We reverse the judgment of the trial court and remand for further proceedings.

Sherry Radack
Chief Justice

Panel consists of Chief Justice Radack and Justices Keyes and Higley.

Petitition for injunction against JP dismissed for lack of jurisdiction

Court of Appeals says it does not have mandamus jurisdiction to issue order against justice of the peace.

In re Johnson, No. 01-08-00489-CV In re George Johnson (Tex.App.- Houston [1st Dist.] June 19, 2008)(per curiam) (no writ power over JP)
Appeal from JUSTICE OF PEACE, PRECINCT 7 of Callahan County

Original Proceedings on Petitions for Writ of Mandamus

MEMORANDUM OPINION

By petition for writ of injunction, relator, George Johnson, challenges the Justice of the Peace Court's (1) denial of his motion to dismiss. We have no general writ power over a justice of the peace. See Tex. Gov't Code Ann. § 22.221(b) (Vernon 2004); Easton v. Franks, 842 S.W.2d 772, 773-74 (Tex. App.--Houston [1st Dist.] 1992, no writ).

We dismiss the petition for injunctive relief for want of jurisdiction.

PER CURIAM

Panel consists of Justices Taft, Nuchia, and Higley.