BEAUMONT – The 9th Circuit Court of Appeals in Beaumont reversed in part and remanded in part a trial court's decision to award a partial summary judgment and attorney's fees to LGI Land LLC against property owners Benders Landing Estates Property Owners Association Inc. in a breach of contract case.
In the opinion, the court noted the 284th District Court in Montgomery County erred in granting a partial summary judgment to LGI because provisions in the Assignment of Developer's Rights specifically "constitute an improper amendment to a restrictive covenant," and such provisions are "void ab initio and of no force and effect."
"BLE POA is the property owners association for the Benders Landing Estates community, and LGI is the property developer of that community. The dispute concerns the transfer of certain rights and obligations between the parties pursuant to a restrictive covenant and an instrument entitled Assignment of Developer’s Rights," the opinion states.
Benders Landing Estates argued that it gained the rights of LGI once it struck an agreement to develop a subdivision on the transfer control date of March 1, 2013. Benders Landing Estates further alleged that "the assignment was an improper reservation of rights that LGI no longer held."
LGI claimed that the assignment was valid and filed for a partial summary judgment, asking the court to consider both the case and attorney's fees separately.
The court ruled that the language of the assignment, if valid, would "broaden the powers of LGI to amend plats, annex property, and modify designated Reserves without further consent" from Benders Landing Estates.
Because of two provisions for amendments contained in the assignment, LGI did not retain any rights to the amendment procedure prior to the transfer control date "without the joinder or consent of any owner or other party, to amend this declaration by an instrument in writing duly signed, acknowledged and filed for record."
The court's disposition rendered that LGI was not the prevailing party, warranting a reversal of the trial court's judgment with regard to attorney's fees.
The court reversed the awarding of attorney's fees to LGI after finding restrictions in provisions of the assignment and remanded the issues to the trial court for further proceedings consistent with its opinion.
Judge Charles Kreger gave the opinion on March 8 with Judges Leanne Johnson and Hollis Horton.