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September 29, 2006
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Case No: 2006-62945 - Gates vs Clear Lake City Community Association
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Texas
Other Court
County of Harris
Branch: District Court
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Douglas T Gates
Gwendolyn T Gates
Represented by: David A Kahne
v.
Clear Lake City Community Association
Represented by: Clayton R Hearn of Roberts Markel PC
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Summary
This case concerns rights to fair treatment by homeonwer associations. Nearly a decade ago, this association baselessly demanded this family pay for sidewalk repairs. The family responded that the association should assist in obtaining government assistance to make the repairs, but that never happened at their house. Instead, recently, the association reasserted the sidewalk demand, and added a demand for attorney fees. The family hired a lawyer and properly refused both demands. However, when the family paid other bills, the association altered checks and misapplied the funds to pay the unlawfully billed attorney fees. To secure homeowner rights, the family seeks declaratory judgment, and other relief as appropriate, with discovery intended to be conducted under Level 2 of the Texas Ruls of Civil Procedure 190.
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Causes of Action: This case concerns rights to fair treatment by homeonwer associations. Nearly a decade ago, this association baselessly demanded this family pay for sidewalk repairs. The family responded that the association should assist in obtaining government assistance to make the repairs, but that never happened at their house. Instead, recently, the association reasserted the sidewalk demand, and added a demand for attorney fees.
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Judge: The Honorable Martha Hill-Jamison
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Lawsuit Text
PLANTIFFS' ORIGINAL PETITION
This case concerns rights to fair treatment by homeonwer associations. Nearly a decade ago, this association baselessly demanded this family pay for sidewalk repairs. The family responded that the association should assist in obtaining government assistance to make the repairs, but that never happened at their house. Instead, recently, the association reasserted the sidewalk demand, and added a demand for attorney fees. The family hired a lawyer and properly refused both demands. However, when the family paid other bills, the association altered checks and misapplied the funds to pay the unlawfully billed attorney fees. To secure homeowner rights, the family seeks declaratory judgment, and other relief as appropriate, with discovery intended to be conducted under Level 2 of the Texas Ruls of Civil Procedure 190.
PARTIES
2. Plaintiffs, Douglas T. Gates and Gwendolyn T. Gates, husband and wife, reside in Harris County, at 1923 Seakale Lane, in Houston, Texas.
3. Defendant, the Clear Lake City Community Association, Inc., a Texas non-profit corporation with registered office in Harris County at 16511 Diana Lane in Houston, Texas, may be served at that address through registered agent Carol A. Hunter.
Facts
4. Mr. Gates bought this home in 1985, before marrying Mrs. Gates in 1988. They now jointly own this property, where they have raised their children.
5. The Gates own their home subject to recorded deed restrictions, which refer to Clear Lake City Community Association. These homeowners (among others) disagree with the extent to which the Association claims power under the deed restrictions and "Guidelines".
6. By letter dated June 3, 1997, the Association demanded the Gates family repair or replace the sidewalk near their home. The Association asserted, if the Gates refused, they would be violating Paragraph 17, Deed Restrictions for Oakbrook Subdivision, Section 3.
7. The Association later admitted paragraph 17 did not apply, and cited a rule that all residences and other buildings must be kept in a good state of repair. Quoting paragraph 21 of the same restrictions. The Association also cited Exterior Maintenance Guidelines purportedly adopted pursuant to Texas Property Code 204.010. After further communications from the Gates family, the Association changed its position again, and asserted that [a]n argument could be made that paragraph 17 applied and also paragraph 12 could be used.
8. The Gates family investigated, and concluded that they had no duty to make the repairs. Indeed, it is not clear that Gates family has authority to repair the sidewalk, given the location of their property line. The Gates family also discovered that, before purporting to impose the "Exterior Maintenance Guidelines", current and former members of the Association's Board had their sidewalks replaced (for free) by the Clear Lake City Water Authority. When the Gates family contacted the Water Authority, they found the program discontinued after many homeowners asked to be put on the Water Authority list for sidewalk repairs.
9. In 1997 and 1998, Mr. and Mrs. Gates (among others) suggested the Association seek City of Houston bonds funds for sidewalk repairs. Eventually the Association took that advice. On January 30, 1998, the Association's General Manager, Beverly Bush, wrote to the Gates family "to confirm that the Association has been in contact with the City of Houston and Clear Lake City Water Authority, and will contact Mr. John branch as you suggested. This matter has been put on hold until more information is received." Soon thereafter, the Association began working with the City of Houston to determine which sidewalks to repair with bond funds from Houston's Safe Sidewalk Program.
10. During 1999, the Association reported on progress, listing streets that would receive new or repaired sidewalks. On this list, the Association included Seakale Lane, where the Gates family lives. However, during this time, the Association continued to send deed restriction violation letters to homeowners on these streets.
11. Eventually the City of Houston did replace sidewalks on Seakale, even on the very block where with the Gates' home. However, with no explanation, those making repairs skipped the sidewalk in front of the Gates home, and in front to their two adjacent neighbors. The Gates family attempted to learn why they were skipped. To date all officials, including one who previously served on the Association's board, refused to provide the requested information.
12. Meanwhile, after years of silence, on September 20 & December 8, 2004, and on March 10, April 19, June 9 & July 11, 2005, the Association again demanded that the Gates family repair the sidewalk near their home, again wrongly asserting that refusal would be a deed restriction violation. These letters did not cite any paragraph of the deed restrictions, but on the back of the letter reprinted an amended version of the Exterior Maintenance Guidelines.
13. In an August 26, 2005, letter, the Association's lawyer threatened to sue. Still the Association did not cite any deed restriction, nor did this letter mention the "Guidelines".
14. The Gates family hired an attorney, who wrote to the Association s lawyer: "The Gates maintain that they are not responsible for the repair of the sidewalk, and that previously, the Association intentionally failed to repair the sidewalk in front of their residence when it replaced the sidewalk on Seakale."
15. The Association responded by disclaiming any responsibility for the sidewalk repair previously undertaken. Still the Association cited no basis to compel the Gates family to make repairs. The Gates' lawyer responded that, in any event, the Association had taken "at least eight years" to pursue this matter, long more than allowed by the four year statute of limitations. Moreover, the Gates' lawyer observed that Association "board member(s) were active in choosing which sidewalks were repaired and which were not", so it was especially odd that when repairs were made to "the sidewalk along Seakale, the sidewalk in front of the Gates home was not included."
16. Still the Association and its attorney continued to demand the Gates family make sidewalk repairs. In response, on April 10, 2006, the Gates' lawyer wrote to the Association's counsel warning against continuing harassment.
17. Then, in May 2006, the Association sent a bill to Mr. and Mrs. Gates. In addition to the standard assessment ($76.61) and a trash collection fee ($84), the Association added bills for legal fees on the "sidewalk" issues ($326). The legal fees date back to September 2005. Previously, however, the Gates family never received an invoice for the legal fees, and the Association had no basis to impose these fees.
18. Also in May, the Association denied the Gates family's right to vote, citing recent by-law changes that purport to deny the right to vote for homeowners if they have unpaid fees or unresolved deed restriction violations. The Gates family always has paid its assessment as well as all other fees demanded (even if improperly) by the Association, so the Association misused the sidewalk dispute and legal fees to deny the Gates family's right to vote.
19. On June 28, the Gates family sent two checks to the Association, one for the exact amount of the annual assessment, and one for the exact amount of the trash collection fee. They also sent a cover letter stating how the Association should apply the checks, to the assessment and trash fee, not to the disputed legal fees. They noted that "your attorney has been notified on two separate occasions that this matter is beyond the statute of limitations and any further attempt by you to coerce compliance, including your failure to remove these fees constitutes harassment. They specifically demanded that the Association remove these fees from [their] account and send written proof thereof."
20. In July, the Association deposited the checks. Each check was altered, with the words "on account" added without authority. The Association then sent an invoice showing the Association did not apply the payments as instructed, but instead used the money first to pay the legal fees to which the Association is not entitled. By not crediting money to pay the assessment or trash fee, the Association may be setting up to file a lawsuit seeking foreclosure, and on September 21, 2006, the Association sent a FINAL NOTICE stating the intent to send the matter to counsel for collection, and further increases in charges.
21. By persistent, excessive, and unwarranted actions including those detailed above, Clear Lake City Community Association violates rights of the Gates family as homeowners under the applicable Deed Restrictions.
22. In natural, probable, and foreseeable ways, the Defendant Association's unlawful conduct caused the following harm to the Plaintiffs Gates: mental anguish; and attorney fees.
23. Plaintiffs seek unliquidated damages within the Court's jurisdictional limits.
Declaratory Judgments
24. As a partial remedy for the Association s unlawful actions, pursuant to the Texas Declaratory Judgment Act, Civil Practice & Remedies Code Chapter 37, the Plaintiffs Gates seek declaratory relief as follows:
a. that they have no duty to repair the sidewalk in front of their property;
b. that they have no duty to pay the legal fees relating to the Association's demand to repair the sidewalk;
c. that the Association had no basis to allocate their specifically-designated payments (for the assessment and trash fee) to pay legal fees relating to the Association s demand to repair the sidewalk; and
d. that the Association had no basis to deny their right to vote, and cannot rely on non-payment of the attorney fee bill to deny them in the future.
Equitable Relief
25. As a partial remedy for the Association's unlawful actions, the Plaintiffs Gates seek injunctions that the Association (a) reallocate the Gates payments to cover their 2006 annual assessment and the 2006 trash collection fee; (b) cease and desist from all demands that the Plaintiffs Gates repair the sidewalk and related demands for attorney fees; and (c) take no further retaliatory or harassing action.
Attorney Fees
26. Plaintiffs are entitled to reasonable and necessary attorney fees for violation of the deed restrictions (Texas Property Code § 5.006 and Texas Civil Practice & Remedies Code § 38.001) and for declaratory judgment claims (Texas Civil Practice & Remedies Code § 37.009).
Conditions Precedent
27. All conditions precedent to the claims for relief have been performed or have occurred.
Prayer
FOR THESE REASONS, Plaintiffs Douglas T. Gates and Gwendolyn T. Gates ask that the Court issue citation for Defendant to appear and answer, and that Plaintiff be awarded judgment against Defendant Clear Lake City Community Association for the following:
a. actual damages with prejudgment and postjudgement interest;
b. declaratory judgments as specified above;
c. equitable relief as specified above;
d. court costs;
e. attorney fees; and
f. all other relief, in law or in equity, to which Plaintiffs may be entitled.
Respectfully submitted,
David A. Kahne
Texas Bar No. 00790129
Law Office of David A. Kahne
P.O. Box 66386
Houston, Texas 77266
Tel.: 713-652-3966
Fax: 713-652-5773
ATTORNEY FOR PLAINTIFFS,
DOUGLAS T. GATES AND
GWENDOLYN T. GATES
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