The Four Seashores, LLC v. Spanish Grant Civic Association, Sections 1 & 2, Inc.--Appeal from County Court No. 3 of Galveston County

Affirmed; Motion for Rehearing Overruled; Memorandum Opinion of September 15, 2005, Withdrawn and Substituted with Corrected Memorandum Opinion filed November 3, 2005

Affirmed; Motion for Rehearing Overruled; Memorandum Opinion of September 15, 2005, Withdrawn and Substituted with Corrected Memorandum Opinion filed November 3, 2005.

In The

Fourteenth Court of Appeals

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NO. 14-04-00638-CV

NO. 14-04-00982-CV

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THE FOUR SEAHORSES, LLC, Appellant

V.

SPANISH GRANT CIVIC ASSOCIATION, SECTIONS 1 & 2, INC., Appellee

On Appeal from the County Court at Law No. 3

Galveston County, Texas

Trial Court Cause No. 51350

CORRECTED MEMORANDUM OPINION

In this consolidated appeal, the Four Seahorses, LLC appeals the granting of a temporary injunction and a permanent injunction in favor of Spanish Grant Civic Association, Sections 1 & 2, Inc. in a dispute involving the interpretation and enforcement of restrictive covenants. In our memorandum opinion of September 15, 2005, we dismissed the appeal. We withdraw our memorandum opinion of September 15, 2005, and substitute this corrected memorandum opinion. For the reasons set forth below, we again dismiss the appeal.

Three individuals (Bill Friedrich, Dick Scott, and Joe Pedigo) and one corporation (owned by Charles Robinson) comprise the Four Seahorses, LLC. In July or August 2003, the Four Seahorses purchased a single-family residence in the Spanish Grant subdivision in Galveston County. Although the members of the Four Seahorses used the house on occasion, the house was also rented on a weekly and weekend bases. Neighbors became concerned about noise and increased traffic due to the rentals. An attorney and neighbor, Jim Schweitzer, wrote to the Four Seahorses on April 28, 2004, explaining that the deed restrictions limited the renting of houses in Spanish Grant to Aa single family,@ and then only for Aresidential purposes.@ The letter further declared: ARecent case law interprets restrictions such as Spanish Grant=s, >single family= restriction, to mean not renting to anyone for less than ninety days. Therefore, demand is made that you immediately stop leasing [the property] for less than 90 days [sic] increments.@[1]

On May 5, 2004, the Four Seahorses filed a declaratory judgment action against Spanish Grant seeking a determination of whether the deed restrictions prohibited the leasing or renting of property to a single family for periods of less than 90 days. On May 28, 2004, Spanish Grant filed an application for a temporary and permanent injunction seeking to enjoin the Four Seahorses from leasing its property for less than 90-day rental periods, leasing to anyone other than a single family, and playing loud music after 10:00 p.m. Spanish Grant also filed a counterclaim against the Four Seahorses seeking $200.00 per day for each day the Four Seahorses had violated the deed restrictions and attorney fees. The Four Seahorses filed a counterclaim against Spanish Grant asserting claims for malicious prosecution of an injunction and statutory violations for bringing a frivolous lawsuit.

On June 24, 2004, after a hearing, the trial court granted Spanish Grant=s application for a temporary injunction providing for the following terms:

The Four Seahorses, LLC, counter-defendant herein, and all of its officers, agents, servants, employees, successors and assigns, and attorneys, are ORDERED to immediately cease and desist from:

a) Renting 12705 Maria Court, Galveston, Texas for non-single family residential purposes,

b) Renting 12705 Maria Court, Galveston, Texas for single-family residential purposes but for less than ninety days,

c) Making any noise or sounds that carry beyond the boundaries of 1270[5] Maria Court, after 10 00 o=clock p m at a level as to interfere with the quiet enjoyment of the surrounding residents, . . .

The trial court set the case for trial on the merits on August 9, 2004. On June 28, 2004, the Four Seahorses filed its notice of appeal of the temporary injunction. On August 12, 2004, the parties entered into a Rule 11 agreement,[2] in which they agreed

(1) to file amended motions for summary judgment on the construction of the deed restrictions for the trial court to decide on August 25, 2004,

(2) to request the trial court to sever out that issue so that it could be immediately appealed,

(3) the claims for malicious prosecution of an injunction and the filing of a frivolous lawsuit would Aremain on hold@ until the appeal of the injunction is decided,

(4) to the extent the temporary injunction has not been disposed of or mooted, the Four Seahorses may pursue that appeal, and

(5) to postpone discovery until the court of appeals has decided the issue of the construction of the deed restrictions.

The parties moved for partial summary judgment on the single family issue and the 90-day rental issue, but not the noise/nuisance issue. On August 25, 2004, the trial court heard the competing motions for summary judgment and on September 10, 2004, granted Spanish Grant=s partial motion for summary judgment, while denying the Four Seahorses= motion. The trial court entered the following injunction permanently enjoining the Four Seahorses from

1) Renting 12705 Maria Court, Galveston, Texas for non-single family residential purposes, and

2) Renting 12705 Maria Court, Galveston, Texas for single-family residential purposes but for less than ninety (90) days.

On September 10, 2004, the trial court also severed the Four Seahorses= claims for malicious prosecution of a injunction and the filing of a frivolous lawsuit from the declaratory judgment and injunction actions, with those claims remaining in the trial court while the injunctions were appealed. On October 10, 2004, the Four Seahorses appealed the permanent injunction.

Spanish Grant has filed motions to dismiss both appeals for mootness because the Four Seahorses sold the house on July 15, 2005, and therefore no longer owns the house. A case becomes moot when there ceases to be an actual controversy between the parties. National Collegiate Athletic Ass=n v. Jones, 1 S.W.3d 83, 86 (Tex. 1999). Deciding the merits of a moot case is to render an advisory opinion. Speer v. Presbyterian Children=s Home & Serv. Agency, 847 S.W.2d 227, 229 (Tex. 1993). Under the separation of powers doctrine, we have no authority to issue advisory opinions. Tex. Const. art. II, ' 1; Brooks v. Northglen Ass=n, 141 S.W.3d 158, 164 (Tex. 2004).

Although not addressed by the parties, we conclude the temporary injunction was rendered moot before the house was sold. Spanish Grant=s motion to dismiss the appeal of the temporary injunction based on the July 15, 2005 sale of the house and the Four Seahorses= response to the motion (as well as arguments presented in the parties= appellate briefs) reveal that the parties have been proceeding on the mistaken belief that the temporary injunction was still in effect at the time of the sale of the house.

The order granting the temporary injunction enjoined the Four Seahorses from the above listed activities Afrom the date of entry of this Order until the trial on the merits of this case, or until further Order of this Court.@ The trial court set the case for trial on the merits on August 9, 2004. On August 12, 2004, the parties entered into a Rule 11 agreement that they would submit the 90-day rental period issue and single family issue via cross-partial motions for summary judgment on August 25, 2004. Accordingly, the trial court heard the competing motions for summary on August 25, 2004.

AThe condition or contingency which marks the duration of a temporary injunction is ordinarily set by the trial court in the injunction itself.@ Perry Bros., Inc. v. Perry, 734 S.W.2d 211, 212 (Tex. App.CDallas 1987, no writ). By its own terms, the temporary injunction expired August 9, 2004Cthe day the trial court set the case for trial on the meritsCand there is no trial court order extending or resetting it for a later date. See Webb v. Hartman Newspaper, Inc., 793 S.W.2d 302, 303 (Tex. App.CHouston [14th Dist.] 1990, no writ) (stating temporary injunction expired by its own terms on March 1, 1990, when the case was scheduled for trial, but the trial court twice reset the case for trial and ordered the terms of the injunction to remain in full force until trial). Moreover, even if the temporary injunction had not expired prior to the trial on the merits, once the trial court entered a final judgment, the temporary injunction was rendered moot while pending on appeal. See Isuani v. Manske-Sheffield Radiology Group, P.A., 802 S.W.2d 235, 236 (Tex. 1991) (AIf, while on appeal of the granting or denying of the temporary injunction, the trial court renders final judgment, the case on appeal becomes moot.@).

With respect to the permanent injunction, we agree that when the Four Seahorses sold the property, there ceased to be a live controversy between the parties. The Four Seahorses, however, contends the appeal of its permanent injunction is not moot because its claims for damages, i.e., malicious prosecution of an injunction and the filing of a frivolous lawsuit, are still pending before the trial court. The Four Seahorses argues that dismissing its appeal as moot would deprive it of the opportunity of seeking attorney fees, costs, and damages, including lost rentals and loss of value on the sale of the house, on those claims. However, because those claims are derivative of the injunction claims, any opinion we might issue on the Four Seahorses= claims for damages and fees still pending in the trial court would merely be advisory. See Tieken v. Midwestern St. Univ., 912 S.W.2d 878, 887 (Tex. App.CFort Worth 1995, no writ) (AWhere there has ceased to be a controversy between the litigating parties due to events occurring after judgment has been rendered by the trial court, the decision of an appellate court would be a mere academic exercise and the court may not decide the appeal.@).

The Four Seahorses further argues its appeal of the permanent injunction is not moot because all the homeowners in Spanish Grant, not just the buyer of its house, are subject to the 90-day rental period set forth in the permanent injunction. However, there is no case or controversy between the new owner or any other homeowner and Spanish Grant before this court, also rendering any decision on the merits by this court advisory.

We grant Spanish Grants= motions to dismiss. Accordingly, we dismiss the Four Seahorses= appeal of the temporary injunction and its appeal of the permanent injunction.

/s/ J. Harvey Hudson

Justice

Judgment rendered and Corrected Memorandum Opinion filed November 3, 2005.

Panel consists of Justices Hudson and Seymore. (Chief Justice Hedges not participating.)

[1] The deed restrictions provide with respect to renting:

Each lot shall be used only for single family residential purposes. The term Aresidential purposes@ excludes, without limitation, hospitals, clinics, duplex houses, apartment houses, garage apartments, hotels and excludes commercial and professional uses whether from homes, residences or otherwise, but includes renting a single family dwelling to a single family. No building shall be erected, placed, altered or permitted to remain on any lot other than one single family dwelling and its usual accessories.

[2] Tex. R. Civ. P. 11.