The Houston Court of Appeals, 14th District recently ruled in Tanglewood Homes Association, Inc. v. Feldman, overturning a trial court judgment for over $ 500,000 that had been awarded in favor of owners after a lengthy bifurcated jury trial. The Feldmans planned to expand their home by purchasing their neighboring lot, adding on to their existing home on part of the neighboring lot, then re-platting the lots, building a fence between them and selling the remainder of the neighboring lot. The HOA initially denied the plans and the Feldmans sued. The owner of the neighboring lot intervened as a plaintiff in the lawsuit. During the lawsuit, the HOA approved the expansion plans but stated that if the remainder of the neighboring lot were sold, the construction of a new residence on the re-platted neighboring lot would violate the deed restrictions.
At trial, the liability questions submitted to the jury contained the phrase “and/or,” such that the jury was asked whether the HOA’s denial of plans was arbitrary and capricious as to the Feldmans “and/or” the neighboring owner, and whether the HOA had made a negligent misrepresentation upon which the Feldmans “and/or” the neighboring owner had justifiably relied. The jury answered yes to the liability questions, awarded $ 90,000 in damages, and over $ 492,000 in attorneys’ fees to the plaintiffs. The HOA argued that the jury findings were fatally ambiguous due to the inclusion of “and/or” and the court of appeals agreed. The court held that without an express finding of liability in favor of each of the plaintiffs, the trial court’s judgment for damages could not stand. The court also overturned the award of attorneys’ fees.
The court did affirm the trial court’s declaratory judgment that detailed the re-plat and construction, that the improvements on the plaintiffs’ lots did not violate the deed restrictions and that the HOA had waived any position to the contrary. The court entered an abatement order and referred the parties to mediation. The opinion can be found at the following link: