BCH Development, LLC v. Lakeview Heights Addition Property Owners’ Ass’n
Dallas Court of Appeals, No. 05-15-00274-CV (July 21, 2015)
Chief Justice Wright (Opinion) and Justices Lang-Miers and Stoddart
BCH proposed to build a house on Monticello Avenue in Dallas with two stories of living space above ground, the upper floor being a “habitable attic.” But the lot on which BCH wanted to build was subject to a restrictive covenant that limited dwellings to “one story in height.” The neighborhood homeowners’ association sued to enforce the covenant, seeking injunctive relief, civil penalties, and attorney’s fees. When the trial court granted a temporary injunction halting the proposed construction, BCH duly filed an accelerated interlocutory appeal under § 51.014 of the Civil Practice and Remedies Code to challenge the injunction.

While that appeal was pending, the trial court granted the association’s motion for summary judgment in part and entered an “Order Granting Permanent Injunction,” effective immediately, that permanently prohibited the proposed construction. The trial court did not, however, dispose of the association’s claims for civil penalties or fees. BCH again filed a notice of accelerated appeal, characterizing this new order as a “mere modification” of the prior temporary injunction.

The Court of Appeals, however, didn’t see it that way. Because the Order Granting Permanent Injunction superseded the temporary injunction, it rendered moot BCH’s appeal of the temporary injunction. So, the Court dismissed that appeal. But then, because the Order Granting Permanent Injunction was interlocutory (the claims for fees and penalties were still pending) but not “temporary,” the Court held it was not appealable until after final judgment. So, it dismissed BCH’s second appeal, as well, leaving BCH subject to the prohibitions of the interlocutory permanent injunctive order but with no immediate right of appeal—evoking notions of the Cheshire Cat in the process.

In dismissing the appeal of the interlocutory permanent injunction, the Court of Appeals relied on three of its own prior decisions that had followed similar logic. In one of those, however, the interlocutory permanent injunction was, by its terms, not effective or enforceable until final judgment. Another was explicitly criticized by the Texas Supreme Court in Qwest Communications Corp. v. AT&T Corp.—a case in which that Court characterized as “temporary,” and therefore immediately appealable, an order that “place[d] restrictions on [the appellant] and [was] made effective immediately so that it operate[d] during the pendency of the suit,” even though that order otherwise bore none of the hallmarks of a temporary injunction. The Dallas Court distinguished Qwest because the second order here (i) displaced what truly was a prior temporary (appealable) injunction, and (ii) was issued on the basis of a summary judgment hearing on the merits. Perhaps we’ll see if the Supreme Court agrees.