Airport Common Property
Airport common property is common because it is burdened by non-exclusive easements for access and use. All hangars and residential lots have an easement for access and use of the runway, parallel taxiway, and ramp area. Other access areas are also easements but they are owned only by those in each development area. For example, those in the Northeast Addition have easements in Kelly Drive and some have easements in both Kelly Drive and Douglas Drive. Those in the Northwest Development have easements in Lindbergh Drive, Doolittle Drive, Macleod Way, and the "A" lots between hangar rows. Those in SW1 and SW2 own their own access easements, including the "A" lots in their row.
So, let's begin with the definition of an easement. An easement is an interest in land in the possession of another which (a) entitles the owner of such interest to a limited use or enjoyment of the land in which the interest exists; (b) entitles him to protection as against third persons from interference in such use or enjoyment; (c) is not subject to the will of the possessor of the land. Restat 1st of Property, § 450.
The essence of the dispute with Mr. Hyde is whether his assumption of record title to Aero Valley's runway-parallel taxiway and ramp area tracts gave him any authority over the easement holders. It did not not. These tracts were already burdened by scores of easements long before Mr. Hyde's companies Hyde-Way, Inc. or Texas Air Classics, Inc. acquired record title to them. In the eyes of real property law, the record title holder is the possessor of the land. Those who own an easement to access and use land are not subject to the will of the possessor of the land. Thus, the definition of an easement immediately exposes the fallacy of Mr. Hyde's claims of authority over the property owner/easement holders. As a matter of law, Mr. Hyde and his companies have only one duty: not to interfere with the rights and duties of the easement holders to operate and maintain Aero Valley Airport.
Airport common areas include the runway-parallel taxiway tracts, ramp area with buildings, and other access areas. Access and use easements to these common areas have been granted to or reserved from all lots within airport boundaries. Property owners can quickly identify the easements associated with their property by using the color-coded map above and clicking on the matching button below. All supporting documents can be accessed from the deed records of Denton County, Texas here https://denton.tx.publicsearch.us/. The volume and page number of the recorded document will be denoted by Volume/Page. For example, volume 1002, page 363 will appear as 1002/363. The Denton County website uses this same convention for searching documents, among several other means of locating documents.
Although county records currently show Hyde-Way, Inc. as the record title holder of some airport common areas—including the runway-parallel taxiway and ramp area—Mr. Hyde personally owns the hangar in which he lives and the deed to his lot granted him an easement to access and use the airport's runway, parallel taxiway, and ramp area tracts. Therefore, Mr. Hyde has no more authority than any other easement holder. He can participate in airport governance, but he has no right to dictate it.
So, let's begin with the definition of an easement. An easement is an interest in land in the possession of another which (a) entitles the owner of such interest to a limited use or enjoyment of the land in which the interest exists; (b) entitles him to protection as against third persons from interference in such use or enjoyment; (c) is not subject to the will of the possessor of the land. Restat 1st of Property, § 450.
The essence of the dispute with Mr. Hyde is whether his assumption of record title to Aero Valley's runway-parallel taxiway and ramp area tracts gave him any authority over the easement holders. It did not not. These tracts were already burdened by scores of easements long before Mr. Hyde's companies Hyde-Way, Inc. or Texas Air Classics, Inc. acquired record title to them. In the eyes of real property law, the record title holder is the possessor of the land. Those who own an easement to access and use land are not subject to the will of the possessor of the land. Thus, the definition of an easement immediately exposes the fallacy of Mr. Hyde's claims of authority over the property owner/easement holders. As a matter of law, Mr. Hyde and his companies have only one duty: not to interfere with the rights and duties of the easement holders to operate and maintain Aero Valley Airport.
Airport common areas include the runway-parallel taxiway tracts, ramp area with buildings, and other access areas. Access and use easements to these common areas have been granted to or reserved from all lots within airport boundaries. Property owners can quickly identify the easements associated with their property by using the color-coded map above and clicking on the matching button below. All supporting documents can be accessed from the deed records of Denton County, Texas here https://denton.tx.publicsearch.us/. The volume and page number of the recorded document will be denoted by Volume/Page. For example, volume 1002, page 363 will appear as 1002/363. The Denton County website uses this same convention for searching documents, among several other means of locating documents.
Although county records currently show Hyde-Way, Inc. as the record title holder of some airport common areas—including the runway-parallel taxiway and ramp area—Mr. Hyde personally owns the hangar in which he lives and the deed to his lot granted him an easement to access and use the airport's runway, parallel taxiway, and ramp area tracts. Therefore, Mr. Hyde has no more authority than any other easement holder. He can participate in airport governance, but he has no right to dictate it.
I. Background Facts
A. Private Flight School to Common-Interest Community
A. Private Flight School to Common-Interest Community
Edna Gardner Whyte (November 3, 1902 – February 15, 1992) founded Aero Valley Airport in 1969 after she acquired two tracts of land totaling 34 acres located about 3.5 miles north of Roanoke, Texas. Ms. Whyte operated Aero Valley Airport as a private flight school from 1969 until 1976. See Figure 1.
In late 1976, Ms. Whyte acquired a 47.5-acre tract adjacent to the airport’s northern boundary. This tract became the Northeast Addition. This acquisition and the third-party acquisition of 8.634 acres on the airport’s southwest side allowed Ms. Whyte to fundamentally change the character of the airport from a flight school to a mixed-use common-interest community. See Figure 2.
In 1977, Ms. Whyte formed Aero Valley Development Company (“AVDCO”) with two others, John R. Everett and Michael J. O’Brien. Whyte conveyed a one-third undivided interest in the 47.5-acre tract to Everett and O’Brien and then split the tract into quarters.[1]
AVDCO extended the airport’s runway into the western quarter and moved the parallel taxiway to the east side for the runway’s entire length.[2] In the eastern quarter, AVDCO platted 18 lots and restricted them to residential use with one private detached hangar per lot.[3] They named this 12.645-acre section Aero Valley Estates. AVDCO filled out the two middle quarters with a mix of T-hangar rows and box hangars for both private and commercial use. AVDCO divided up the Northeast Addition tracts to allow each partner to develop and sell tracts independently to recover their investment costs.[4]
In late 1976, Ms. Whyte acquired a 47.5-acre tract adjacent to the airport’s northern boundary. This tract became the Northeast Addition. This acquisition and the third-party acquisition of 8.634 acres on the airport’s southwest side allowed Ms. Whyte to fundamentally change the character of the airport from a flight school to a mixed-use common-interest community. See Figure 2.
In 1977, Ms. Whyte formed Aero Valley Development Company (“AVDCO”) with two others, John R. Everett and Michael J. O’Brien. Whyte conveyed a one-third undivided interest in the 47.5-acre tract to Everett and O’Brien and then split the tract into quarters.[1]
AVDCO extended the airport’s runway into the western quarter and moved the parallel taxiway to the east side for the runway’s entire length.[2] In the eastern quarter, AVDCO platted 18 lots and restricted them to residential use with one private detached hangar per lot.[3] They named this 12.645-acre section Aero Valley Estates. AVDCO filled out the two middle quarters with a mix of T-hangar rows and box hangars for both private and commercial use. AVDCO divided up the Northeast Addition tracts to allow each partner to develop and sell tracts independently to recover their investment costs.[4]
Aero Valley's main common areas consist of the runway, parallel taxiway, and ramp area. Two types of easements are associated with these common areas. One type addresses airport operation and the other addresses access and use.
Operation easements:
Access and use easements:
AVDCO provided runway access and use of all airport facilities via easements appurtenant to each multi-lot tract or individual lot sold.[5] These deeds identify by metes and bounds both the fee-simple tract and the easement tracts that constitute the airport’s main common areas.
Everett and O'Brien conveyed the 5.7-acre extended runway-parallel taxiway tract back to Whyte in exchange for Whyte granting them appurtenant easements to access and use both the extended runway-parallel taxiway tract and the original runway-parallel taxiway tract consisting of 10.06 acres.[6] Whyte also granted her partners the right to assign the easement to others.[7] AVDCO also platted the runway-parallel taxiway and other access areas as easements in 1978.[8] Whyte retained ownership of the entire 34.0 acres of her two original airport tracts until 1980.
The terms of the easements require use for vehicular access and airport and taxiway purposes. These terms also include the right to improve, reconstruct, repair, and inspect the land burdened by the easements while many of them also include an obligation to perform these duties.[9] AVDCO’s deed restrictions require all property owners to pay fees to keep the airport’s common areas properly maintained.
AVDCO executed and recorded deed restrictions in three separate documents to accommodate three types of structures: residential homes with a single private detached hangar, box hangars, and T-hangars.[10] The first restrictions turned over control of the common areas to a seven-member architectural control committee (“ACC”). The ACC "shall also act as a governing body with legal authority to make whatever rulings, or call for an election, deemed necessary to protect the best interests of the property owners.”[11] Other airpark communities have adopted substantially the same language.[12]
AVDCO’s second and third deed restriction documents vary in only two respects: Storage of flammable liquids and the display of large signs are both prohibited for hangars with common walls. These include T-hangars and some box hangars. Stand-alone box hangars providing aircraft maintenance or painting services would necessarily need to store flammable liquids and use large signs to advertise their business. In contrast, T-hangars exist in rows with common walls. Thus, a fire caused by flammable liquids could destroy an entire row of T-hangars. These differences reflect a responsible and prudent approach to restricting these two types of airport property.
Operation easements:
Access and use easements:
AVDCO provided runway access and use of all airport facilities via easements appurtenant to each multi-lot tract or individual lot sold.[5] These deeds identify by metes and bounds both the fee-simple tract and the easement tracts that constitute the airport’s main common areas.
Everett and O'Brien conveyed the 5.7-acre extended runway-parallel taxiway tract back to Whyte in exchange for Whyte granting them appurtenant easements to access and use both the extended runway-parallel taxiway tract and the original runway-parallel taxiway tract consisting of 10.06 acres.[6] Whyte also granted her partners the right to assign the easement to others.[7] AVDCO also platted the runway-parallel taxiway and other access areas as easements in 1978.[8] Whyte retained ownership of the entire 34.0 acres of her two original airport tracts until 1980.
The terms of the easements require use for vehicular access and airport and taxiway purposes. These terms also include the right to improve, reconstruct, repair, and inspect the land burdened by the easements while many of them also include an obligation to perform these duties.[9] AVDCO’s deed restrictions require all property owners to pay fees to keep the airport’s common areas properly maintained.
AVDCO executed and recorded deed restrictions in three separate documents to accommodate three types of structures: residential homes with a single private detached hangar, box hangars, and T-hangars.[10] The first restrictions turned over control of the common areas to a seven-member architectural control committee (“ACC”). The ACC "shall also act as a governing body with legal authority to make whatever rulings, or call for an election, deemed necessary to protect the best interests of the property owners.”[11] Other airpark communities have adopted substantially the same language.[12]
AVDCO’s second and third deed restriction documents vary in only two respects: Storage of flammable liquids and the display of large signs are both prohibited for hangars with common walls. These include T-hangars and some box hangars. Stand-alone box hangars providing aircraft maintenance or painting services would necessarily need to store flammable liquids and use large signs to advertise their business. In contrast, T-hangars exist in rows with common walls. Thus, a fire caused by flammable liquids could destroy an entire row of T-hangars. These differences reflect a responsible and prudent approach to restricting these two types of airport property.
Other than these minor differences, both documents are identical. For example, they both require the ACC to assess and collect fees that “shall be paid by each property owner to provide for proper maintenance of common areas, including, but not limited to, buildings and taxiways.”[12] This requirement necessarily extends to all easement holders because they all have a duty to pay common-area maintenance fees and the ACC is the only entity who has the authority to administer the rights and duties of all easement holders.[13] Whyte and the executors of her estate later sold all property Whyte owned subject to these restrictions.[15]
In 2019, the POA consolidated these documents without amendment into one document to prevent having to read all three documents together to determine the burdens and benefits associated with each airport lot. The term “common areas” in AVDCO’s restrictions refers to the easement tracts identified either generally or specifically by metes and bounds in each deed. These non-exclusive easement tracts are common areas by definition. The terms “buildings and taxiways” include the ramp area with its associated buildings[14] and other taxiways not identified by metes and bounds in the deeds.
After relinquishing control of common areas to their respective POAs, the developers of two North Texas private airport developments--Jack Hurst at Aero Country and B. I. “Buck” Lock at Propwash—conveyed fee-simple title of the airport common areas to the POA after a reasonable time had passed to allow them to protect their investment.[16] Buck Lock also conveyed all mineral interests to the POA.[17]
Whyte and AVDCO now owned all property available for airport development except the 8.634 acres on the airport’s southwest side. Lee Waldrop had acquired the northernmost 1.85 acres in 1974.[18]
While forming AVDCO, Whyte negotiated with Bobby Cole to acquire the remaining 6.784 acres on the southwest side of the runway for airport purposes. In exchange, Whyte agreed to grant an appurtenant easement for access and use of the runway and other airport facilities, including an obligation to pay a reasonable runway maintenance fee.[19]
On November 10, 1977, Cole filed the deed to the 6.784 acres for record and Whyte did the same for the easements.[20] The terms of Cole’s easement required Cole to convey the southern 3.784 acres to Ted Fischer, leaving Cole with the northern 3.0 acres.[21] Cole built a large hangar for aircraft maintenance on the south half of his tract and Fischer built a large hangar and established an aircraft dealership on his. Whyte later granted the same easement to Lee Waldrop’s 1.85 acres in 1980.[22] After AVDCO extended the runway, Whyte re-granted the same easement to Cole and Fischer to ensure they had a legal right to access and use the entire runway.[23]
Glen Hyde appeared in 1979. He formed Hyde-Way, Inc. with his wife Candace and began borrowing money to buy multi-lot tracts from AVDCO. He would then build and sell hangars to aircraft owners in accordance with Whyte’s development plan. Hyde-Way first acquired a 4.537-acre tract out of the Northeast Addition in early 1980.[24] This tract was planned for several rows of T-hangars. Like other purchasers, Hyde’s deed included the common-area easements and was subject to the recorded deed restrictions.[25] Hyde built and sold many of these T-hangars with the AVDCO easements and restrictions intact.
Whyte retired from daily airport management in late 1980 and began selling off her original 34.0 acres in smaller tracts of various sizes, subjecting each tract to AVDCO's restrictions and easements.[26] In April 1980, she conveyed the first group of these smaller tracts to Gene Varner.[27] These tracts included the north runway-parallel taxiway extension (5.7 acres) and part of her original 24.216-acre tract containing the ramp area and original runway-parallel taxiway tract. From this conveyance, Ms. Whyte reserved a 162.5-foot wide strip of land along the east side of the runway. This 8.38-acre tract is now called the Southeast Development and includes 30 box hangar tracts facing the runway. She also reserved an easement in both runway-parallel taxiway tracts and ramp area.[28]
Less than two months later, she conveyed the southeast strip she had reserved in the previous deed also to Gene Varner, subject to AVDCO’s restrictions and easements. Whyte financed Varner’s acquisition and Varner secured it with a deed of trust.[29] Varner then began building hangars and selling hangar tracts in the Southeast Development.
In 1982, Hyde borrowed more money and purchased some of these tracts from Varner.[30] Between 1980 and 1986, Hyde had executed 73 deeds of trust reflecting over $2.1 million of borrowed money. By 1991, Hyde had borrowed over $4.875 million. In contrast, Whyte had borrowed only $163,500 to acquire the entire airport including the Northeast Addition.[31]
Whyte also sold John Brown (Triangle Aviation) and Hyde-Way, Inc. two multi-lot tracts on the west side of the runway out of her 9.874-acre tract. These two tracts combined now consist of eight hangars located between Southwest Development Phase 2 and the last row of open T-hangars. After Varner acquired the common area servient estates in 1980, he granted easements for runway access and use to both tracts.[32] These easements require uses “consistent with airport purposes.”[33]
In late 1982, Hyde assumed Varner’s deed to airport common areas and his deed of trust to Whyte.[34] Whyte entered into an agreement with Hyde that defined her terms. These terms included deferring payments until November of 1983, at which time Hyde would resume estimated monthly payments of $2,922.13 for 17 years until October 22, 2000.[35]
On October 4, 1984, Cole and Waldrop platted no less than eight box hangar lots each as Southwest Development Phase 1 and Phase 2.[36] Waldrop deeded his acreage to Justin State Bank in lieu of foreclosure in 1988.[37] Freddie Ann Harvey Dearman acquired Southwest Development Phase 2 from the bank and amended the plat in 2013, reducing the number of lots from eight to six.[38] See Figure 2.
With the help of her partners, Cole, Fischer, and others, Whyte transitioned the airport from a sole proprietorship to a robust mixed-use common-interest community. None of those helping Whyte develop the airport were professional land developers. They were all aviation enthusiasts.
[more background coming soon]
A private airport becomes a common-interest community ("CIC") and directly subject to CIC law if (1) at least part of the development is restricted to residential use and (2) individually owned properties are obligated to contribute to common-area maintenance, operation, and enforcement of the restrictions regardless of usage.
Aero Valley meets both elements. First, the 12.645-acre tract in the northeast quadrant known as Aero Valley Estates is restricted to residential use. Second, all property owners have the right to access and use airport common property (runway-taxiway-ramp area) via non-exclusive easements. (As for the internal access areas between hangar rows, property owners have a right to access and use them via a mix of non-exclusive easements and co-ownership in fee simple.) Third, all property owners are obligated by virtue of their easements in or co-ownership of common property to contribute to its maintenance, pay for services and airport facilities and enforcement of the restrictions regardless of whether the owner uses the common property. These obligations are stated explicitly in the terms of the easements and the Aero Valley Development Company ("AVDCO") deed restrictions.
Note: All property owners must use common property to access their hangar or home. Thus, there is no such thing as an owner not using or having the benefit of using common property.
AVDCO executed and recorded deed restrictions that require an Architectural Control Committee ("ACC") to act as the airport's governing body. Its governing duties include a requirement to assess and collect fees to maintain the common areas. (All easement holders already had a common-law duty to maintain their easements. They just needed a single, central authority to administer the rights and duties associated with them. As the elected representatives of all property owners, the ACC and now the POA' board of directors serves that role.)
B. Developer's Duties to Turn Over Control and Transfer Common Property
After establishing a common-interest community, the developer must perform two duties. First, the developer must create and turn over control of the development to a property owners association. Second, the developer must then transfer common property to the property owners association after a reasonable time has passed to allow the developer to protect the investment. § 6.19.
Ms. Whyte accomplished the first in 1977 when she turned over control of the airport to the ACC. The ACC subsequently delegated its authority to the POA's board of directors. The important point here is that Ms. Whyte was no longer the airport’s sole owner and operator. She shared these roles with lot purchaser/easement holders.
When Gene Varner and then Glen Hyde stepped into her shoes as the developer, only one duty remained: the duty to transfer airport common property to the property owners. This duty matures after enough lots have been sold to protect the developer's investment. When Varner first acquired the runway common area, that duty had not yet matured because Whyte retained ownership of nearly all developable tracts within her original 34.0 acres. But it matured shortly thereafter when Whyte sold most of her remaining acreage to Gene Varner, Glen Hyde, John Brown, and the co-executors of her estate, Kelly Bryan and Jack Garrett.
IMPORTANT! Developers of private airports in Texas generally transfer airport common property to a property owners’ association as a matter of course. Two local private airports serve as examples: Propwash (4775/2251) and Aero Country (Collin County 3283/649 (recorded in land records as opposed to deed records)). B.I. ("Buck") Lock, the developer of Propwash, also conveyed all mineral interests to the POA. 2005-153394.
When Hyde acquired airport common areas in late 1982, he knew he had acquired tracts of land subject to scores of non-exclusive easements and governed by the ACC. Hyde's failure to acknowledge these facts quickly led to a non-stop cycle of crisis, conflict, and litigation that has lasted for over 35 years. Hyde contends that his acquisition of airport common areas reversed the clock and put him back in Edna’s shoes as a sole proprietor. Hyde refused to acknowledge that the ACC governed the airport and he had no intention of transferring the airport's common areas to the property owners.
Hyde cannot blame this on ignorance. Every piece of airport property he acquired from Whyte and AVDCO includes a non-exclusive easement for runway access and use and is subject to AVDCO’s deed restrictions.
The POA’s board of directors seeks to end the litigation cycle and put our airport back on track. Texas common law and common-interest community law provide the tools needed.
II. Easements
All individually owned property intended for hangar or home construction has an easement for access and use of the runway and parallel taxiway. The language granting the easement varies depending on where the hangar/home is located and when the easement was granted.
Northeast: TOGETHER WITH a non-exclusive easement for vehicular access and airport and taxiway purposes including all necessary and desirable appurtenances along, over, under, across and upon the four (4) tracts of land described by metes and bounds in Exhibit “B” attached hereto …, together with the right and obligation of improving, reconstructing, repairing, and inspecting as grantee may from time to time find necessary and the right to remove or prevent the construction on said tracts of all buildings, structures, or other obstructions which may endanger or interfere with the safety or convenient use of said runway or taxiway. See e.g., 1026/675 (AVDCO to Price); 1002/633, 1002/641; (AVDCO to Hyde-Way, Inc.).
The four tracts of land mentioned above include the north runway-parallel taxiway extension, Kelly Drive, Douglas Drive, and the original south runway-parallel taxiway.
Some earlier deeds did not include the word “obligation.” Despite this omission, ownership of a non-exclusive easement under these circumstances includes a common-law duty to contribute to its maintenance. AVDCO's deed restrictions also require payment of fees to keep the common areas properly maintained. Thus, whether the word “obligation” appears in any given deed, the obligation to contribute to maintenance and operation still exists.
Former POA treasurer Bob Smith litigated this same issue at Ironhead Airport in 2008. Smith v. Huston, 251 S.W.3d 808, 829 (Tex. App.—Fort Worth, 2008, pet. denied) (“Under general easement law, the owner of the dominant estate (here, the lot owners) has a duty to maintain the easement, and the owner of the servient estate (here, the Hustons) has no right to interfere with the rights of the dominant estate to the easement.”)
Hyde included AVDCO's easement in the NE lots he sold until he acquired airport common areas in late 1982. See e.g., 1056/200 (Hyde-Way, Inc. to Terry, T7-7, Dec. 18, 1980). After that he illicitly inserted his restrictions and runway access license in these deeds. (Jay May is now trying to sell his NE T-hangar but cannot do so because Hyde refuses to sign the correction deed unless May indemnifies him of his wrongdoing. Many other NE hangar owners are in the same predicament but do not know it yet.)
Southeast (Hollywood): A nonexclusive easement for an airport runway and taxiway and all necessary or desirable appurtenances for the operation of same along, over, across, under and upon the above-described tract; together with the right of improving, reconstructing, repairing, and inspecting as Grantor herein may from time to time find necessary; the right to remove or prevent the construction on said tract of all buildings, structures, and other constructions which may endanger or interfere with the safety or convenient use of said runway; and the right to assign this easement for the purpose of permitting others to use said tract. Warranty Deed with Vendor’s Lien, Edna Whyte to Gene Varner, 1014/46 at 48. This easement expressly includes the ramp area, buildings (airport office and hangars), and gas pumps on it.
After Edna sold the southeast strip (“Hollywood”) to Gene Varner in 1980, Varner included the language used in the Northeast easements in the deeds he granted to subsequent buyers of hangar lots. These easements include an express maintenance obligation: “together with the right and obligation of improving, reconstructing, repairing, and inspecting as may from time to time be necessary ….” (See e.g., Warranty Deed with Vendor’s Lien, Gene Varner to Odum T. Ollen, 1234/509 at 510; Gene Varner to L&R Flight, 1234/574.
Note: Glen Hyde illicitly inserted his restrictions and runway access license in these deeds.
Southwest (includes SW1, SW2, and 3.784 acres south of SW1 formerly owned by Ted Fischer): The right-of-way and easement Grantors have conveyed to [Grantees] herein shall be for the benefit of and as an easement appurtenant to his respective tract of land … and it is understood by Grantors that [grantees] with his heirs and assigns, for a reasonable runway maintenance fee, shall have uninterrupted use, liberty and easement of passing in, along and over Grantor’s lands and premises together with the use and enjoyment of all airport facilities and runways of Grantors.
West: THAT I, GENE VARNER, Grantor, hereby grant to [HYDE-WAY, INC. and John & Carolyn Brown (Triangle Aviation)] a perpetual easement for the free and uninterrupted use of operating aircraft in, on, over, and across the [runway-parallel taxiway tracts] consistent with airport purposes, including the landing, taking off, taxiing, towing and transporting of aircraft by Grantee, his heirs and assigns, as an appurtenance to [the eight hangar tracts between SW2 and the open T-hangars] as shall be necessary or convenient at all times forever and to defend these rights and privileges in perpetuity. Easement, Gene Varner to Hyde-Way, Inc. and John & Carolyn Brown, 1144/179, May 24, 1982 and 1145/812, June 3, 1982 respectively.
Entire airport: That I, EDNA GARDNER WHYTE, … do hereby give grant and convey to LANDON F. SON… the right to use for vehicular access, including, but not limited to automobiles, trucks, and aircrafts together with the right for use by aircraft for taxiing, taking off, overflying, landing and for other airport purposes including all necessary and desirable appurtenances along, over, under, across and upon the now existing runways and taxiways of Aero Valley Airport … together with the right of access from any property now owned by Grantor or sold by Grantor to Grantee within the confines of the above described Aero valley Airport, across any property now within the confines of Aero-valley Airport, together with the right of improving, reconstructing, repairing and inspecting as Grantee may from time to time find necessary roadways, taxiway, runways, and drainage structures or excavations and the right to remove or prevent the construction on said Aero Valley Airport of all buildings, structures or other obstructions which may endanger or interfere with the safe or convenient use of said runways and taxiways and any areas necessary to assure Grantees access to said runways and taxiways from any area now owned by Grantor or sold by Grantor to Grantee within the confines of said Aero Valley Airport as it now exists. To have and to hold the same perpetually to LANDON F, SON, his heirs and assigns. Easement, Whyte to Landon Son, 1760/35, June 3, 1985.
At the time Whyte granted this easement, she owned nine hangars in NW1, all unsold lots in Aero Valley Estates, and several other lots in the northeast quadrant.
Northwest: See section V below.
A. Easement Holders as Airport Owners
Those property owner/easement holders who have a right to access and use Aero Valley’s runway and other airport facilities can be properly described as the owners of the airport. Texas courts frequently refer to easement holders as owners. Noell v. City of Carrollton, 431 S.W.3d 682, 696-700 (Tex. App.—Dallas 2014, pet. denied). The Dallas Court of Appeals reminded the City of Carrollton that an easement is also a property interest protected by the Texas Constitution. An easement is an insurable property right. Easement holders have a duty to maintain their easements, and the owner of the servient estate (Hyde) has no right to interfere with the dominant estates (hangar owners). Reyna v. Ayco Dev. Corp., 788 S.W.2d 722, 724 (Tex. App.—Austin 1990, writ denied); Smith v. Huston, 251 S.W.3d 808, 829 (Tex. App.—Fort Worth 2008, writ denied).
Edna granted the first runway access and use easement to Bobby Cole and Ted Fischer on November 9, 1977. 862/941. At that time, Edna was in the process of extending the runway to its present length of 3,500 feet and moving the taxiway to the east side. After completing this task, Whyte re-granted the same easement to Cole and Fischer so their respective properties would have a legal right to access the entire runway. 1150/268. Whyte granted an easement for access and use of the runway and all airport facilities to Lee Waldrop’s 1.85 acres on July 9, 1980. 1109/537. In October 1984, Cole platted his property as Southwest Development Phase I (Cab. D, page 270) and Lee Waldrop platted his as Southwest Development Phase II (Cab. D, page 271).
Shortly after Edna acquired the Northeast Addition in 1976, she formed Aero Valley Development Company (“AVDCO”). AVDCO platted the runway-parallel taxiway tracts as easements and began selling lots in the Northeast Addition with runway access and use of all airport facilities provided universally by appurtenant easement. The plat of the runway-parallel taxiway easement is included as Exhibit “C” in a warranty deed from AVDCO to Donald Sitta. 909/650.
An easement “is a nonpossessory interest that authorizes its holder to use the property for only particular purposes.” Marcus Cable Assocs., L.P. v. Krohn, 90 S.W.3d 697, 700 (Tex. 2002) (citing Restatement (Third) of Property (Servitudes) § 1.2 cmt. d). Aero Valley’s easements limit use to airport purposes. All easements granted by Whyte and her AVDCO partners require use “for vehicular access and airport and taxiway purposes.” See e.g., 1002/620. The easements Varner granted to Brown and Hyde for west-side hangar development require use “consistent with airport purposes.” 1145/812 (Brown); 1144/179 (Hyde).
By 1982, Whyte, her partners, and Gene Varner had granted appurtenant easements for access and use of the runway and all airport facilities to every lot then within airport boundaries. These easement holders are properly described as the airport’s owners. After the ACC delegated its authority to the POA, the POA became the governing body authorized to administer the rights and duties of all easement holders.
B. Aero Valley Meets the Requirements to Create a Common-Interest Community
Declarations: Creation of a common-interest community occurs in a declaration. A declaration consists of the recorded documents containing the servitudes that create and govern a common-interest community. Restat 3d of Prop: Servitudes, § 6.2(5) (3rd 2000). Aero Valley’s declarations include AVDCO’s deed restrictions, the amended Northwest Development deed restrictions, each property owner’s deed containing the easements to common property, and the Articles of Incorporation and Bylaws of the Aero Valley Property Owners Association stating that one of the Association’s purposes is to govern and manage the airport for the benefit of all properties within airport boundaries.
Servitudes: At the heart of all common-interest communities are servitudes. Two kinds of servitudes establish Aero Valley as a common-interest community: (1) non-exclusive easements for access and use of common property and (2) deed restrictions that require the airport’s governing body to assess and collect fees to keep common property properly maintained. 1002/363; 1070/529.
Ownership of Common Property: Common property may be owned by community members as tenants in common in a fee-simple estate or as easements. Restat 3d of Prop: Servitudes, § 6.2, cmt b. (3rd 2000). Aero Valley’s property owners share common-property ownership in both forms. All property owners own an easement to access and use the runway, parallel taxiway, and ramp area (either expressly or as an appurtenance). Those on the east side of the runway have a mix of easements and tenancies in common. All east side T-hangar owners own an undivided fee-simple interest in the access area surrounding their row. Thus, these owners are tenants in common with their fellow T-hangar owners. East side T-hangar and box hangar owners own an easement in Kelly Drive and Douglas Drive for vehicle access and airport and taxiway purposes. In contrast, Northwest Development T-hangar owners own easements to cross all other T-hangar tracts in their row and the access areas required to taxi to and from the runway. All roads within airport boundaries are private except Cleveland Gibbs Road and Airway Blvd, both of which are county roads. Property owners have easements to access and use the private roads, which also serve as taxiways.
Only the runway-parallel taxiway and ramp area with buildings are common property to all property owners as easements. Other access areas are common only to those who own easements in them or an undivided fee-simple interest.
C. Common-Interest Community Law Applies Directly to Aero Valley
Common-interest community law applies directly to Aero Valley Airport. A mixed-use community is directly subject to common-interest community law if it meets three requirements: (1) at least part of the community is restricted to residential use, (2) all property owners have a duty to contribute to the maintenance of common property regardless of the amount of use, and (3) common properties are appurtenant to individually owned properties within the community. Restat 3d of Prop: Servitudes § 6.2.
The second element requires further clarification. Landowners who share a common easement are not necessarily part of a common-interest community. The duty to contribute to easement maintenance still exists, but each share could be determined by the frequency and intensity of actual use. Restat 3d of Prop: Servitudes § 4.13 cmt d.; Clearpoint Crossing Prop. Owners Ass’n v. Chambers, 569 S.W.3d 195, 203 (Tex. App.—Houston [1st Dist.] 2018, pet. denied) (frequency and intensity of use can be considered in allocating maintenance costs).
Allocating maintenance costs by proportional use does not apply to any lots within Aero Valley Airport because the terms of the applicable deed restrictions and easements require payment of maintenance fees regardless of use so long as they are allocated on a reasonable basis. The POA bases assessments on square footage. Texas courts consider square footage a reasonable basis. See e.g., Waterford Harbor Master Ass’n v. Landolt, No. 14-13-00817-CV, 2015 Tex. App. LEXIS 622 (Tex. App.—Houston [14th Dist.] Jan. 22, 2015). Hyde agrees, stating that he would go along with the POA’s plan only if it based assessments on square footage. He has since reneged on his agreement. (This is a common theme with Hyde.)
Even if the declarations did not contain the explicit duty to contribute to airport maintenance, that duty would be implied. “Under the rule stated in this section, the power to raise funds reasonably necessary to carry out the functions of a common-interest community will be implied if not expressly granted by the declaration.” Restat 3d of Prop: Servitudes, § 6.5 cmt b. (3rd 2000).
Returning now to the direct application of common-interest community law, Aero Valley Airport meets all three requirements. First, AVDCO restricted the 18 lots of Aero Valley Estates to residential use. Second, AVDCO’s restrictions and terms of the easements require all property owners to contribute to airport maintenance regardless of amount of use. Third, the runway, taxiway, and other airport common areas are burdened by easements appurtenant to all individually owned tracts within airport boundaries. Thus, Aero Valley is directly subject to common-interest community law.
Developers of most common-interest communities record either a single declaration for the entire development or separate declarations for each development stage. Aero Valley Airport did not follow this path because it started out as Edna Whyte’s private flight school and she owned all airport property. When she began the transition to a mixed-use common-interest community, she focused development on the Northeast Addition because she wanted to build her retirement home there and literally have a taxiway to her front door. Development of the hangar tracts she retained from her original 34.0 acres would occur in due time.
These circumstances precluded a single declaration. To fully grasp the benefits and burdens associated with specific airport lots requires construing several instruments together. The POA simplified this process for most property owners by consolidating all AVDCO deed restrictions into one document and recording the results at 2019-136773. This document is also available on the POA’s website.
D. Scope of AVDCO’s Restrictions
Under common-interest community law, when the first lot is sold subject to restrictions, they become effective as to all similarly situated property in the development. § 6.2, cmt d. All individually owned property within Aero Valley Airport is similarly situated because it is intended to support the airport (runway and other airport facilities) and every lot is restricted to accommodate one of three types of airport structures: home/private hangar (Aero Valley Estates) or T-hangars or box hangars everywhere else. Thus, the AVDCO restrictions would automatically apply to all individually owned property no matter where it is located so long as it enjoys an appurtenant easement for runway access and use.
As of today, Texas has not explicitly adopted Restatement rules as such. Texas courts nevertheless quote with approval and routinely rely on these rules. Fortunately, Texas common law would reach the same conclusion even without adopting the Restatement's rules explicitly, but adopting the Restatement rules would produce the most efficient, appropriate, and just resolution in this case. Therefore, at the very least, AVDCO’s restrictions apply to all property Whyte owned. Most lots in the Northeast Addition are explicitly restricted while some are not. The executors of Whyte’s estate explicitly restricted the four rows of open T-hangars on the west side of the runway and all other property acquired from Whyte’s estate on the east side. Whyte conveyed all other properties she owned subject to the AVDCO restrictions.
Under the doctrine of implied reciprocal negative easements, restrictions will apply to well-defined, similarly situated property retained by the original grantor if (1) the grantor intended to adopt a scheme or plan of development that encompassed both the property conveyed and the property retained, (2) the grantor subdivided the property into lots and included in the deeds of the properties conveyed substantially uniform restrictions designed to further the scheme or plan, and (3) the grantees had actual or constructive notice of the restrictions. Evans v. Pollock, 796 S.W.2d 465, 471 (Tex. 1990); Holloway Tr. v. Outpost Estates Civic Club, Inc., 135 S.W.3d 751, 756 (Tex. App.—Houston [1st Dist.] 2004, pet. denied).
All explicitly unrestricted tracts at Aero Valley Airport meet all three elements of the doctrine. First, there is no dispute that Edna had adopted a development plan that encompassed both the property she conveyed and the property she retained. Second, there is also no dispute that all lots within airport boundaries are well defined and similarly situated. Finally, Hyde and Varner had actual notice of the restrictions because they were both grantees and grantors of the same restrictions.
AVDCO’s restrictions contemplate three types of airport structures: residential homes with a single detached private hangar and T-hangars and box hangars of various sizes. Although the restrictions for each structure appear in three separate documents, they are otherwise uniform with regard to the ACC's purpose and duties. All recordings of AVDCO’s amendable restrictions after the ACC's creation require the ACC (now the POA) to “carry out a general plan for the protection, use, and convenience of all property owners.” 2019-136773 at p. 5.
To determine all burdens and benefits associated with a particular lot, three documents must be construed together: (1) the restrictions that created the ACC (this document also contains the restrictions for residential homes), (2) the restrictions for T-hangars and box hangars that also enumerate the ACC’s purpose and powers, and (3) the deed to the lot that contains the easements for access and use of the runway and access areas appurtenant to the lot in question. The second paragraph of the first set of restrictions requires the ACC to serve as the governing body. The T-hangar or box hangar restrictions contain the ACC’s duty to assess and collect fees to keep airport common property properly maintained.
Having to construe three separate documents to determine one’s rights and obligations is less than ideal. In 2019, the POA’s board of directors consolidated without amendment all AVDCO restrictions into one document so property owners could more conveniently determine their rights and obligations.
Whether Aero Valley’s property owners acquired ownership of common property by easement or as tenants in common, they all have the same rights and duties associated with access and use of airport facilities. AVDCO either included the restrictions with the deed or recorded them before conveying the property to which they applied. As AVDCO developed the Northeast Addition, Whyte retained ownership of the entire runway and the remainder of her original 34.0 acres.
As for the property Whyte did not own, the terms of the easements she or her successors granted require the payment of reasonable maintenance fees. See e.g., Waldrop easement for the six lots in Southwest Development Phase 2, 1109/537. As the airport’s governing authority, the POA administers the rights and duties associated with all common property. Thus, the POA has the authority to assess and collect fees from all property owners to keep common property properly maintained.
Like many other developments during that era, AVDCO did not create and record one declaration for the entire airport. Edna’s vision of the airport evolved into something much greater than she may have originally anticipated after she acquired the Northeast Addition. Thus, instead of having a single declaration covering all property within airport boundaries, AVDCO applied deed restrictions appropriate for the planned structure as lots were sold. But when the first lot is sold subject to the restrictions, they become effective as to all similarly situated property in the development. Restat 3d of Prop: Servitudes, § 6.2 (3rd 2000). Therefore, the AVDCO restrictions apply at least to all property Whyte previously owned within airport boundaries.
III. A Developer’s Duties to Create Association and Turn Over Control
When Varner stepped into Whyte’s shoes as a developer in 1980, Whyte had already fulfilled her duty to create an association and turn over control to the property owners. Only one duty remained: the duty to transfer common property to the property owners. Nowhere in Aero Valley’s declarations is the accomplishment of this duty expressly stated. Thus, it must be implied as required under § 6.19.
The developer of a common-interest-community has two primary duties: (1) a duty to create an association to manage common property and enforce the servitudes and (2) a duty to transfer common property to the property owners after the time reasonably necessary to protect the developer’s interests in marketing and completing the project. Restat 3d Prop: Servitudes § 6.19.
Whyte fulfilled the duty to create an association to manage common property and turn over control by creating an ACC that is required to act as a governing body and assess and collect fees to provide for proper maintenance of common areas. The POA arguably stepped into the ACC’s shoes in 1985 when seven property owners incorporated the Aero Valley Property Owners Association. The seven incorporating members and first Board of Directors were Thaine Bandt, Bob Cole, Don Hawkins, Dean Henry, Gary Laughlin, Bill Rucker, and Zena Rucker. Each of these initial directors owned property in various parts of the airport. A copy of the POA’s original Articles of Incorporation and Bylaws and their subsequent amendments is recorded at 2016-135441.
The duty to transfer common property to the property owners is necessary because it prevents or eliminates conflicts of interest that inevitably arise between developers and property owners. The longer the developer retains control, the greater the likelihood of conflict. Accordingly, modern common-interest-community statutes specify timetables within which the developer must turn over control and common property to the members. Id. cmt a.
No truer words could be said about Aero Valley. Hyde assumed Whyte’s role as developer in 1982. Most common-interest community statutes would have required Hyde to turn over the common areas within two years. The Texas Supreme Court, however, has not adopted the Restatement or the Uniform Common-Interest Ownership Act (“UCIOA”). Thus, these secondary sources provide only persuasive rather than binding authority. But so long as the Restatement does not conflict with Texas law, a Texas court would rely on the Restatement to resolve disputes and further the common law in this state just like many other states have done.
When Varner stepped into Whyte’s shoes as a developer in 1980, the duty to transfer common property to the property owners may not have matured quite yet because Whyte still owned several areas available for further development in her original 34.0 acres.
Hyde inherited the same duty to turn over common property when he assumed Varner’s deed and note to these same common properties in 1982. But Hyde had no intention of transferring common property to the property owners. He did not even acknowledge that Whyte had turned over control to the property owners. In his mind, he had turned back the clock to 1976 when Edna Whyte owned the entire airport and had not yet granted the first runway access easement.
A. Facts in Tennessee Case Closely Mirror Aero Valley’s
Aero Valley is not the only community to suffer wrongful developer actions. A Tennessee court of appeals recently dealt with facts strikingly similar to the facts here. Innerimages, Inc. v. Newman, 579 S.W.3d 29 (Tenn. Ct. App. 2019). In this case, Tennessee adopted for the first time the Restatement’s rules governing a developer’s duties to turn over control and transfer common property to the property owners. The Innerimages court noted that at least two courts in other states have cited § 6.19 favorably and could not identify a single case in which a court rejected the Restatement approach. Id. at 46 n.19.
The antagonist in Innerimages v. Newman is Sandra Gunn. She developed a residential community called Shagbark. She then started another development within Shagbark called The Village and recorded separate deed restrictions for it. According to those restrictions, after 75% of the lots in The Village were sold all property owners would automatically become members of The Village Property Owners Association, and the association would exercise the rights and responsibilities formerly exercised by the developer. 579 S.W.3d at 35.
Like Hyde’s Northwest Development, Gunn had grandiose plans to develop The Village in several phases. But over the course of over 24 years Gunn had constructed only four homes, the last of which was built in 2007. Like Gunn, Hyde has not built a hangar in over 25 years. Like Hyde, Gunn had installed conduits and piping for underground utilities but did not supply water or septic systems. To have water, property owners had to rely on a private well drilled by one of the property owners. Each property owner maintains their own septic system. The situation in Hyde’s Northwest Development mirrors Ms. Gunn’s situation in The Village.
Like Hyde, Gunn promised to keep common areas properly maintained but failed to keep her promises. The trial court determined that Gunn commingled maintenance funds, interfered with homeowners’ use of their property, would not and could not fulfill her obligations to the landowners, and never intended to relinquish control to a homeowner’s association. 579 S.W.3d at 38. The court also found that Gunn used Innerimages as a business conduit “to divert assets to the detriment of creditors” and purely as “an instrument for the enrichment of Sandra Gunn.” Id. Hyde fits the same profile.
And just like Hyde, “Homeowners in this case have received nothing except grief and torment by Sandra Gunn . . .. She still talks of proposals …. It is not really an overstatement … that nothing in the way of those things … has been accomplished in 24 years, except the building and sale of four (4) homes. … The Village is at a dead standstill and the poor homeowners are at the mercy of Sandra Gunn.” Id. at 47. Hyde established the same dysfunctional environment at Aero Valley. We began reversing the process in 2016. We just need to finish the job.
B. A Tennessee Court Adopts Restatement Rules and Fixes the Problem
To fix these problems, the court ordered Gunn to create a homeowners’ association that would have “all the rights and responsibilities of the developer” and turn over certain common areas to the association. Id. The creation of a property owners association with all the rights and responsibilities of the developer has already been completed at Aero Valley Airport.
In Innerimages, the heart of the controversy was whether a developer who has failed to establish a homeowners’ association and provides only minimal services may continue to enforce restrictive covenants against residents in a common-interest community. “Although this is an issue of first impression in this state, the Restatement directly speaks to it:
(1) The developer of a common-interest-community project has a duty to create an association to manage the common property and enforce the servitudes unless exempted by statute.
(2) After the time reasonably necessary to protect its interests in completing and marketing the project, the developer has a duty to transfer the common property to the association, or the members, and to turn over control of the association to the members other than the developer. . . .”
Restatement (Third) of Property: Servitudes § 6.19 (emphasis in original). Comment (a) explains the rationale for this provision:
In providing that the developer has an implied duty to create an association, this section reflects widespread development practice and follows modern common-interest-community statutes. 579 S.W.3d at 45-46.
The developer and the purchasers of property in a common-interest community have interests in controlling the common property and the association that may come into conflict. The developer’s primary interest is in completing and selling the project, while that of the purchasers is in maintaining their property values and establishing the quality of life they expected when buying the property. Both the developer and the purchasers have substantial investment interests that are affected by the amount of assessments, the level of maintenance and capital improvements, and the establishment of reserves for future maintenance and replacement of common property. The developer needs to retain control of the association long enough to avoid changes that will jeopardize its ability to sell the remainder, while the purchasers need to stabilize assessments and take charge of the rules governing operation of the community. The longer the developer retains control, the greater the likelihood of conflict. Accordingly, modern common-interest-community statutes specify timetables within which the developer must turn over control to the members.
Comment (b) elaborates:
In determining when control of a project reasonably must be turned over to the members, the percentage of lots or units that have been sold, the interval since the first unit was sold, and the level of the developer’s construction and marketing activities are relevant. The Uniform Common Interest Ownership Act [UCIOA] provides a timetable for turning over of control based on these factors. In the absence of a controlling statute, a court may look for guidance to such a timetable in determining when the developer is required to cede control.
579 S.W.3d at 45-46.
The court noted that, under the UCIOA, the developer of a common-interest community must cede control to a homeowners association (1) 60 days after conveyance of three-fourths of the units that may be created to unit owners other than a declarant; (2) two years after all declarants have ceased to offer units for sale in the ordinary course of business; (3) two years after any right to add new units was last exercised; or (4) the day the declarant, after giving notice in a record to unit owners, records an instrument voluntarily surrendering all rights to control activities of the association. UCIOA § 1-103(d). Id. at 47.
Noting that § 6.19 of the Restatement is relatively new and has only been considered by a few courts, “the principles it articulates are not revolutionary” and it reflects widespread development practice. Id. at 48. “Indeed, one of the primary goals of a developer is to develop real estate and turn over control of that property to a self-regulating community.” Id.
According to the court, “Requiring developers to … turn over control after a reasonable time helps ensure that property owners can actually obtain the ‘form of collective decision making’ that they bargained for when they purchased their property.” Id.
Furthermore, “When the developer’s authority to enforce restrictive covenants is challenged, courts should consider the principles in the Restatement (Third) of Property: Servitudes § 6.19(1)-(2) in determining whether the developer has discharged its duties to the property owners and/or the property owners association.”
The Innerimages court also emphasized that developers owe fiduciary duties to property owners and property owner associations. The court confirmed the trial court’s finding that Gunn was liable for breach of fiduciary duty because the developer “breached her duties under [The Village Restrictions.]” “We interpret the trial court’s ruling as a determination that the developer did not act in good faith in continuing to develop the property and in providing the services promised.” Id. at 50. The court also pierced the corporate veil and held Ms. Gunn personally liable for damages. Id. at 52.
One of the main differences between the facts in Innerimages and here is that none of the Aero Valley declarations requires the developer to turn over common property to the association. Importantly, neither the Propwash nor the Aero Country declarations required the developer to transfer common property to the POA. But they did so anyway without judicial intervention. The Tennessee court nevertheless provides a remedy: “This Court has the authority to adopt provisions of a Restatement in order to further the development of the common law in this state.” Id. at 46. “To the extent that the developer has not discharged its duties under these provisions, courts may exercise their equitable powers to fashion an appropriate remedy.” Id. at 49.
Texas courts have the same authority to fashion an appropriate remedy. The appropriate remedy at Aero Valley is the same as the remedy in Innerimages. If Hyde or any other owner of common property does not voluntarily convey it to the POA, then the court should require it.
C. Whyte Fulfills Her Developer Duties
Ms. Whyte began selling lots and granted the first runway access and use easements in 1977. When she created the first deed restrictions that established airport governance in the elected representatives of the property owners, the transition to a mixed-use common-interest community was nearly complete. 944/478. All that remained was turning over ownership of the airport’s common properties to the property owners’ association.
Completing this last step usually occurs as a matter of course. As noted above, two local private airports serve as examples: Propwash Airport (4775/2251), also in Denton County, and Aero Country Airport in Collin County (3283/649 land records of Collin County as opposed to deed records). Mr. B.I. "Buck" Lock, the developer of Propwash, also conveyed all mineral interests to the POA. 2005-153394. Both developers turned over common properties even though nothing in the declarations required it and judicial intervention was not required.
D. Hyde Ignores His Developer Duties, Chaos Ensues
By 1982, Whyte, AVDCO, and Gene Varner had granted runway access easements to all properties they intended to include within airport boundaries. Hyde did not acquire the Northwest Development property until 1983. After acquiring the primary airport common areas (runway-parallel taxiway-ramp area) in late 1982, Hyde might have had the authority to grant further easements (servitudes) for runway access if he met two conditions. First, additional servitudes could not unreasonably interfere with the enjoyment of the easements already granted. Restat 3d Property: Servitudes § 4.9. Second, Hyde could not effectively amend the original AVDCO declarations such that he would materially change the character of the development and the burdens on existing community members. Restat 3d of Prop: Servitudes, § 6.21.
Hyde and his various entities own both dominant and servient estates. Thus, evaluating the status of the Runway and Taxiway Access addendum requires considering both circumstances. The owner of a dominant estate cannot extend an easement to serve non-dominant estate property. Restat 3d of Prop: Servitudes, § 4.11 (3rd 2000). On the other hand, the owner of the servient estate may be able to add additional servitudes if contemplated by the original parties. Restat 3d of Prop: Servitudes, § 4.9 (3rd 2000) (holder of the servient estate is entitled to make any use of the servient estate that does not unreasonably interfere with enjoyment of the servitude).
If construed as a license, Hyde’s Runway and Taxiway Access addendum violates both conditions. First, it would change the character of the development and fundamentally alter the burdens on existing community members because non-exclusive licenses and non-exclusive easements to use the same common areas are fundamentally incompatible because Hyde's RTL splits property owners into two opposing groups, each paying maintenance fees to a different entity. With non-exclusive easements, the easement holders are responsible for funding the operation and maintenance of the common areas. Under a license, the licensor alone is responsible. This arrangement produces irreconcilable conflicts. It prohibits easement holders from distributing maintenance costs fairly among all those who have a right to access and use common property and creates irreconcilable operational and management conflicts.
Texas law does not allow this incompatible mixture for at least two reasons. First, the owner of the servient estate cannot grant additional servitudes that unreasonably conflict with pre-existing servitudes (non-exclusive easements in this case). As noted above, easements and licenses to access and use the same common areas are like oil and water. They don’t mix because of conflicting rights and duties. Second, the additional burden on the existing easements must have been contemplated by the original parties. Here, Whyte never intended to include Northwest Development lots within airport boundaries because she had to sue Hyde after she discovered his intentions and he would not budge. In that lawsuit, she challenged his right to grant runway access by any means. 1536/176; 1617/927; 2414/215. In this same lawsuit, she also rescinded a quit-claim deed purporting to grant Hyde the right to grant runway access by easement or license.
Finally, the original parties did not contemplate the increased use imposed by an additional 500 aircraft (125 aircraft per phase estimated). Based on an estimate of the maximum number of hangars and the number of aircraft these hangars could accommodate, Whyte contemplated a total of about 350 aircraft to share the airport’s single runway. Including all four phases of the Northwest Development would increase use by 243%. The additional load incurred by the 110 hangars already built in Phases 1 and 2 represents a 140% increase. Two hangars in Phase 2 should soon begin construction, adding another six aircraft or more. A reasonable increase would likely fall in the 20% to 30% range based on the 350 aircraft Whyte had planned.
So, no matter how you look at it, the increased use Hyde planned to impose was patently unreasonable. But to prevent yet more trauma to those who purchased hangars in reliance on Hyde’s representations, the POA’s board of directors approved including Northwest Development Phases 1 and 2 within airport boundaries. But the problem of funding the taxiways and infrastructure Hyde failed to provide still hangs over the heads of Northwest Development hangar owners. Some rows have no taxiway and those that do are in such poor condition that they cannot be used as taxiways at all. Hyde ran water lines but Northwest Development owners have no water unless they provide it themselves.
IV. Easements & Licenses Fundamentally Incompatible
Unreasonable increased use and increased costs, however, do not tell the full story. Texas law prohibits the conflicts Hyde’s license agreement creates. The Restatement also prohibits any attempt to amend original declarations that would materially change the character of the development and the burdens on existing community members. Restat 3d of Prop: Servitudes, § 6.21.
Hyde’s license would materially change the character of the development for several reasons. First, a license offers none of the protections of an easement. A licensee has no ability to protect the use of the land. An easement holder does. Under a license, Hyde could turn the runway into a parking lot and the licensee would have no recourse.
Second, paying a license fee to Hyde rather than an assessment to the POA based on a budget approved by the property owners would materially change the burdens on existing community members because Hyde never had a budget and has stated that he never will. Thus, the license fee was arbitrary. Payment of a license fee to Hyde prohibited fair distribution of maintenance fees among all property owners. Splitting the responsibility between two different entities with vastly different priorities to operate an airport safely and keep it properly maintained does not and will not work.
Finally, Hyde’s claims that his license shields property owners from liability is nonsense. Hyde could not and did not indemnify the hundreds of pre-existing easement holders. Plaintiff’s counsel could easily demonstrate that Hyde’s “license” is really an easement. If such a lawsuit should arise, the court would likely hold the property owners liable for damages caused by Hyde’s failure to operate the airport safely or keep it properly maintained. Although property owner/licensees may have a cause of action against Hyde for fraud, any property owner relying on Hyde’s representations would merely look foolish.
These kinds of conflicts fully explain why the “first in time, first in right” rule exists. It eliminates conflicting claims to the same property. “The superiority of different claims on the same property is determined according to the order in time that the competing claims are created.” Conoco, Inc. v. Amarillo Nat’l Bank, 950 S.W.2d 790, 796 (Tex. App.—Amarillo 1997, pet. denied); World Help v. Leisure Lifestyles, 977 S.W.2d 662, 669 (Tex. App.—Fort Worth 1998, pet. denied). All runway access easements preceded Hyde’s license. Thus, Hyde’s license, if it is a license, is void. To protect their hangar investments, property owners must construe the document as an easement.
Public Access Airport Property? In 1992, Hyde conveyed airport common property and several of his own vacant lots to Texas Air Classics, Inc. (“TAC”), a non-profit corporation organized under 26 U.S.C.A. § 503(c). Hyde formed TAC for several reasons, not least of which was to reduce property tax appraisal rates on his property for his own personal benefit. TAC lost its non-profit status in 2013, but Hyde failed to wind down the non-profit’s business or dispose of its assets as required by law. On the same day that the non-profit terminated, Hyde formed a for-profit corporation with the same name.
TAC granted Hyde-Way, Inc. a deed of trust to secure the note on the property but TAC never made payments under its terms. During the POA’s previous litigation against Hyde, Patrick Schurr, a lawyer from the Scheef & Stone law firm in Frisco, executed a substitute trustee’s deed claiming to foreclose on the property. The deed states:
"Notices stating the time, place, and terms of sale of the Property were posted and filed, as required by § 51. 002 of the Texas Property Code, and other requirements of that statute have been met. As required by that statute and by the Deed of Trust, Substitute Trustee sold the Property to Buyer, who was the highest bidder at the public auction, for the amount of the sale. The sale began at the time specified above and was concluded by 1 :00 p.m. of the same day. a public sale held at the Denton County courthouse."
2017-26535. There is no evidence in the public record that notice was given or that any such public sale ever occurred.
Finally, Hyde restricted several vacant lots and other undeveloped properties as public access airport property. These properties have never been used and cannot be used for public access airport property in their present state. Hyde has nevertheless enjoyed a vastly reduced tax appraisal rate on these properties for nearly 30 years.
In addition to claiming the airport "public access," Hyde also restricted the name of the airport to Northwest Regional, granted himself the authority to unilaterally allow or prevent anyone or any number of persons runway access rights, and several other restrictions. 3415/321; 3415/338. Because these tracts were already restricted under the AVDCO restrictions, Hyde would have to amend them to change them. Property owners generally had no notice of these restrictions because they appear only in Hyde entity deeds. Hyde made no attempt to amend the AVDCO restrictions. Thus, these restrictions are void.
V. Hyde’s Easements in the Northwest Development
Hyde has granted so many runway access easements to Northwest Development lots that claiming his Runway and Taxiway Access addendum is a license is absurd. Hyde created the Runway and Taxiway Access license agreement as an addendum to the deed restrictions he imposed on the Northwest Development in 1983. In 1987, Hyde lost all unsold Northwest Development lots and other airport properties he owned to First Interstate Bank (“Bank”). The Bank had perfected a $1.68 million judgment against Hyde because of Hyde's fraudulent conveyance of airport common areas to a Nevada corporation owned by Hyde. The Bank’s settlement agreement required Hyde to convey easements for runway access and use to all unsold lots and to any lots Hyde-Way, Inc. or Hyde personally would ever acquire in the future. In July 1983, Hyde conveyed easements for runway access and use to Lewisville National Bank when the bank acquired eight hangars in Row 4 of Northwest Development Phase 1 (“NW1”). The grant includes non-exclusive easements over all the “A” lots in front of them. (Hangar Lots 4-1, -3, -4, -5, -7, -9, -15, -16, -18, -20; “A” lots 1A, 3A, 5A, 7A, 9A, 11A, 13A, and 15A; 2A, 4A. 6A, 8A, 10A, 12A, 14A, 16A, 18A, and 20A).
The settlement agreement applied to Hyde personally and to Hyde-Way, Inc. Hyde attempted to defeat the settlement agreement by creating other entities to buy and sell hangars. These additional Hyde entities include Dreamships, Flight Data, and Rotor-Dyne. They are obviously Hyde's alter egos. Under these circumstances, a Texas court would pierce the corporate veil just as easily as the Tennessee court did in Innerimages, Inc. v. Newman. Thus, any hangars Hyde acquired under any of these entities would receive runway access easements just as if they were acquired by Hyde-Way, Inc. (all NW lots already had runway access easements under Hyde's original restrictions because this document includes all NW lots. See Volume 1208, page 944 corrected at Volume 1889, page 9).
In November 1983, Hyde-Way, Inc. conveyed nine more hangars out of NW1 to Edna Whyte as partial payment for what he still owed her for common property (i.e., the runway-parallel taxiway tracts) and other airport tracts after defaulting on payments (1-1; 2-5; 3-6, -8, -14; 4-6, -8, -14; and 8-1). (HW to Whyte 1297/151, Nov. 22, 1983). Because the value of these hangars turned on whether they had runway access, Whyte had to agree to runway access, otherwise she would have lost even more due to Hyde’s default. Thus, Hyde effectively prevented her from proceeding with the lawsuit, leaving the adjudication of Hyde’s license for another day.
Hyde began conveying the same hangar to two different parties immediately after he acquired airport common property. In December 1983, Hyde sold NW1 hangar tract 2-5 to Dan and Ann Thomas, which is the same tract he conveyed to Whyte less than two months before. (HW to Thomas 1315/157, Dec. 29, 1983). Ann did not discover that she and Dan had received a voidable deed until after Dan died and she tried to sell the hangar. Because Whyte was the defrauded party, Whyte or the executors of her estate could have declared the Thomas deed void. But because the executors of Whyte's estate did not account for this hangar, they did not challenge the Hyde to Thomas deed. That deed is now considered valid.
Whyte was nevertheless still the legal title holder. Therefore, this lot and her other eight NW1 hangars acquired a runway access and use easement in an easement deed dated November 8, 1985 to Landon Son. In that easement deed, Whyte granted appurtenant easements for runway access and use to these nine hangars and to all other airport property she still owned. See Volume 1760, page 35. Keep in mind, though, that all NW lots already had runway access easements via Hyde's first restrictions. He just called it a license. Finally, all properties outside the Northwest Development on which Hyde attempted to impose his license addendum already enjoyed appurtenant easements for runway access and use.
Both as a practical matter and as a matter of law, Hyde’s license is a license in name only. A license is revocable at will and non-transferable. An instrument that is irrevocable for 99 years and renewable for another 99 years like Hyde’s is not a license. A written instrument that is transferable to subsequent owners and grants the right of ingress and egress at any time like Hyde’s is not a license. These are characteristics of an easement or possibly a covenant running with the land. Hyde’s Runway and Taxiway Access addendum is best construed as an easement.
Other than the obvious fact that Hyde’s “license” has been an abject failure as a matter of undisputed history, there are more adverse consequences of construing it as a license. A license can be revoked at any time at the whim of the licensor. If the licensor sells the land subject to the license, the license terminates. If the licensor wants to use the land contrary to the terms of the license, too bad. The license terminates. Under a license, nothing would prevent Hyde from selling the runway to a buyer who turns it into a self-storage facility. A licensee has no recourse other than potentially nominal monetary damages. Who would invest hundreds of thousands of dollars in an airplane hangar under these circumstances?
Only one conclusion follows: Hyde’s license scheme is a sham that resulted in a one-way trip to self-destruction. Recognizing that our airport is a common-interest community and Hyde’s NW addendum is an easement eliminates all property-related issues. Applying these rules allows the POA to administer consistent rights and duties among all airport property owners.
[1] Buffington, H. Glenn. "Edna Gardner Whyte". The Vintage Airplane. October 1973, pp. 12–14, 16.
[2] 888/301
[3] The two runway-parallel taxiway tracts are 2,247 feet by 195 feet (original) and 1,273 feet by 195 feet (extended) for a total length of 3,520 feet.
[4] 922/478, refiled to include Exhibit “A” at 1015/136.
[5] E.g., 1056/707 (Everett); 983/195 (O’Brien); 940/660 (Whyte).
[6] See e.g., 4377/1481 at 1487.
[7] 909/585; 909/587.
[8] 909/585.
[9] 909/651 at 654-655.
[10] Id.
[11] 922/478; 1002/363; 1025/830 (re-recorded at 1070/529, 1112/465, and 1142/467); 3083/1.
[12] 922/478, ¶ 2.
[13] See e.g., Noell v. City of Carrollton, 431 S.W.3d 682, 705 (Tex. App.—Dallas 2014, pet. denied). Instead of an ACC, the Air Park Dallas restrictions provide for a five-member “Zoning Committee” to be elected by a majority of the lot owners.
[1] 888/301
[2] 922/478, refiled to include Exhibit “A” at 1015/136.
[3] E.g., 1056/707 (Everett); 983/195 (O’Brien); 940/660 (Whyte).
[4] See e.g., 4377/1481 at 1487.
[5] Id.
[6] 909/585; 909/587.
[7] 909/585.
[8] 909/651 at 654-655.
[9] 922/478; 1002/363; 1025/830 (re-recorded at 1070/529, 1112/465, and 1142/467); 3083/1.
[10] 922/478, ¶ 2.
[11] See e.g., Noell v. City of Carrollton, 431 S.W.3d 682, 705 (Tex. App.—Dallas 2014, pet. denied). Instead of an ACC, the Air Park Dallas restrictions provide for a five-member “Zoning Committee” to be elected by a majority of the lot owners.
[12] 1002/363; 1025/830, etc.
[13] In 2019, the POA consolidated without amendment all AVDCO restrictions into one document to greatly simplify the need to read at least three separate documents together to determine the burdens and benefits associated with each lot.
[14] The ramp area buildings were and remain the only buildings in existence located on a servient-estate tract.
[15] See e.g., 4377/1481; 1018/501.
[16] 4775/2251 (Lock); Collin County 3283/649 (Hurst) (recorded in land records as opposed to deed records).
[17] 2005-153394.
[18] 726/406.
[19] 1109/537 at 538.
[20] 862/938; 862/941.
[21] Whyte had borrowed money from Fischer in 1975 for airport development. Fischer retired Whyte’s debt as consideration for the runway access easement.
[22] 1109/537.
[23] 1150/268.
[24] 1002/633.
[25] Hyde’s deed and deed restrictions were recorded on the same day, restrictions first then the deed. 1002/363 and 1002/633 on February 22, 1980.
[26] The 34.0 acres consisted of two tracts: 24.216 and 9.784 acres respectively.
[27] 1014/46.
[28] Id.
[29] 570/175.
[30] 1174/626.
[31] 862/941 ($20,000 from Ted Fischer); 323/262 ($33,500 for 24.216 acres); 289/320 ($25,000 for 9.784 acres); 430/795 ($85,000 for 47.5 acres).
[32] 1144/179 (Hyde); 1145/812 (Brown).
[33] Id.
[34] 1174/615; 570/175.
[35] 1174/251; 1174/619
[36] Cab D, pp. 270 and 271 respectively, Plat Records, Denton County, Texas.
[37] 2342/908
[38] Cab D, p. 271, amended May 17, 2013.
In 2019, the POA consolidated these documents without amendment into one document to prevent having to read all three documents together to determine the burdens and benefits associated with each airport lot. The term “common areas” in AVDCO’s restrictions refers to the easement tracts identified either generally or specifically by metes and bounds in each deed. These non-exclusive easement tracts are common areas by definition. The terms “buildings and taxiways” include the ramp area with its associated buildings[14] and other taxiways not identified by metes and bounds in the deeds.
After relinquishing control of common areas to their respective POAs, the developers of two North Texas private airport developments--Jack Hurst at Aero Country and B. I. “Buck” Lock at Propwash—conveyed fee-simple title of the airport common areas to the POA after a reasonable time had passed to allow them to protect their investment.[16] Buck Lock also conveyed all mineral interests to the POA.[17]
Whyte and AVDCO now owned all property available for airport development except the 8.634 acres on the airport’s southwest side. Lee Waldrop had acquired the northernmost 1.85 acres in 1974.[18]
While forming AVDCO, Whyte negotiated with Bobby Cole to acquire the remaining 6.784 acres on the southwest side of the runway for airport purposes. In exchange, Whyte agreed to grant an appurtenant easement for access and use of the runway and other airport facilities, including an obligation to pay a reasonable runway maintenance fee.[19]
On November 10, 1977, Cole filed the deed to the 6.784 acres for record and Whyte did the same for the easements.[20] The terms of Cole’s easement required Cole to convey the southern 3.784 acres to Ted Fischer, leaving Cole with the northern 3.0 acres.[21] Cole built a large hangar for aircraft maintenance on the south half of his tract and Fischer built a large hangar and established an aircraft dealership on his. Whyte later granted the same easement to Lee Waldrop’s 1.85 acres in 1980.[22] After AVDCO extended the runway, Whyte re-granted the same easement to Cole and Fischer to ensure they had a legal right to access and use the entire runway.[23]
Glen Hyde appeared in 1979. He formed Hyde-Way, Inc. with his wife Candace and began borrowing money to buy multi-lot tracts from AVDCO. He would then build and sell hangars to aircraft owners in accordance with Whyte’s development plan. Hyde-Way first acquired a 4.537-acre tract out of the Northeast Addition in early 1980.[24] This tract was planned for several rows of T-hangars. Like other purchasers, Hyde’s deed included the common-area easements and was subject to the recorded deed restrictions.[25] Hyde built and sold many of these T-hangars with the AVDCO easements and restrictions intact.
Whyte retired from daily airport management in late 1980 and began selling off her original 34.0 acres in smaller tracts of various sizes, subjecting each tract to AVDCO's restrictions and easements.[26] In April 1980, she conveyed the first group of these smaller tracts to Gene Varner.[27] These tracts included the north runway-parallel taxiway extension (5.7 acres) and part of her original 24.216-acre tract containing the ramp area and original runway-parallel taxiway tract. From this conveyance, Ms. Whyte reserved a 162.5-foot wide strip of land along the east side of the runway. This 8.38-acre tract is now called the Southeast Development and includes 30 box hangar tracts facing the runway. She also reserved an easement in both runway-parallel taxiway tracts and ramp area.[28]
Less than two months later, she conveyed the southeast strip she had reserved in the previous deed also to Gene Varner, subject to AVDCO’s restrictions and easements. Whyte financed Varner’s acquisition and Varner secured it with a deed of trust.[29] Varner then began building hangars and selling hangar tracts in the Southeast Development.
In 1982, Hyde borrowed more money and purchased some of these tracts from Varner.[30] Between 1980 and 1986, Hyde had executed 73 deeds of trust reflecting over $2.1 million of borrowed money. By 1991, Hyde had borrowed over $4.875 million. In contrast, Whyte had borrowed only $163,500 to acquire the entire airport including the Northeast Addition.[31]
Whyte also sold John Brown (Triangle Aviation) and Hyde-Way, Inc. two multi-lot tracts on the west side of the runway out of her 9.874-acre tract. These two tracts combined now consist of eight hangars located between Southwest Development Phase 2 and the last row of open T-hangars. After Varner acquired the common area servient estates in 1980, he granted easements for runway access and use to both tracts.[32] These easements require uses “consistent with airport purposes.”[33]
In late 1982, Hyde assumed Varner’s deed to airport common areas and his deed of trust to Whyte.[34] Whyte entered into an agreement with Hyde that defined her terms. These terms included deferring payments until November of 1983, at which time Hyde would resume estimated monthly payments of $2,922.13 for 17 years until October 22, 2000.[35]
On October 4, 1984, Cole and Waldrop platted no less than eight box hangar lots each as Southwest Development Phase 1 and Phase 2.[36] Waldrop deeded his acreage to Justin State Bank in lieu of foreclosure in 1988.[37] Freddie Ann Harvey Dearman acquired Southwest Development Phase 2 from the bank and amended the plat in 2013, reducing the number of lots from eight to six.[38] See Figure 2.
With the help of her partners, Cole, Fischer, and others, Whyte transitioned the airport from a sole proprietorship to a robust mixed-use common-interest community. None of those helping Whyte develop the airport were professional land developers. They were all aviation enthusiasts.
[more background coming soon]
A private airport becomes a common-interest community ("CIC") and directly subject to CIC law if (1) at least part of the development is restricted to residential use and (2) individually owned properties are obligated to contribute to common-area maintenance, operation, and enforcement of the restrictions regardless of usage.
Aero Valley meets both elements. First, the 12.645-acre tract in the northeast quadrant known as Aero Valley Estates is restricted to residential use. Second, all property owners have the right to access and use airport common property (runway-taxiway-ramp area) via non-exclusive easements. (As for the internal access areas between hangar rows, property owners have a right to access and use them via a mix of non-exclusive easements and co-ownership in fee simple.) Third, all property owners are obligated by virtue of their easements in or co-ownership of common property to contribute to its maintenance, pay for services and airport facilities and enforcement of the restrictions regardless of whether the owner uses the common property. These obligations are stated explicitly in the terms of the easements and the Aero Valley Development Company ("AVDCO") deed restrictions.
Note: All property owners must use common property to access their hangar or home. Thus, there is no such thing as an owner not using or having the benefit of using common property.
AVDCO executed and recorded deed restrictions that require an Architectural Control Committee ("ACC") to act as the airport's governing body. Its governing duties include a requirement to assess and collect fees to maintain the common areas. (All easement holders already had a common-law duty to maintain their easements. They just needed a single, central authority to administer the rights and duties associated with them. As the elected representatives of all property owners, the ACC and now the POA' board of directors serves that role.)
B. Developer's Duties to Turn Over Control and Transfer Common Property
After establishing a common-interest community, the developer must perform two duties. First, the developer must create and turn over control of the development to a property owners association. Second, the developer must then transfer common property to the property owners association after a reasonable time has passed to allow the developer to protect the investment. § 6.19.
Ms. Whyte accomplished the first in 1977 when she turned over control of the airport to the ACC. The ACC subsequently delegated its authority to the POA's board of directors. The important point here is that Ms. Whyte was no longer the airport’s sole owner and operator. She shared these roles with lot purchaser/easement holders.
When Gene Varner and then Glen Hyde stepped into her shoes as the developer, only one duty remained: the duty to transfer airport common property to the property owners. This duty matures after enough lots have been sold to protect the developer's investment. When Varner first acquired the runway common area, that duty had not yet matured because Whyte retained ownership of nearly all developable tracts within her original 34.0 acres. But it matured shortly thereafter when Whyte sold most of her remaining acreage to Gene Varner, Glen Hyde, John Brown, and the co-executors of her estate, Kelly Bryan and Jack Garrett.
IMPORTANT! Developers of private airports in Texas generally transfer airport common property to a property owners’ association as a matter of course. Two local private airports serve as examples: Propwash (4775/2251) and Aero Country (Collin County 3283/649 (recorded in land records as opposed to deed records)). B.I. ("Buck") Lock, the developer of Propwash, also conveyed all mineral interests to the POA. 2005-153394.
When Hyde acquired airport common areas in late 1982, he knew he had acquired tracts of land subject to scores of non-exclusive easements and governed by the ACC. Hyde's failure to acknowledge these facts quickly led to a non-stop cycle of crisis, conflict, and litigation that has lasted for over 35 years. Hyde contends that his acquisition of airport common areas reversed the clock and put him back in Edna’s shoes as a sole proprietor. Hyde refused to acknowledge that the ACC governed the airport and he had no intention of transferring the airport's common areas to the property owners.
Hyde cannot blame this on ignorance. Every piece of airport property he acquired from Whyte and AVDCO includes a non-exclusive easement for runway access and use and is subject to AVDCO’s deed restrictions.
The POA’s board of directors seeks to end the litigation cycle and put our airport back on track. Texas common law and common-interest community law provide the tools needed.
II. Easements
All individually owned property intended for hangar or home construction has an easement for access and use of the runway and parallel taxiway. The language granting the easement varies depending on where the hangar/home is located and when the easement was granted.
Northeast: TOGETHER WITH a non-exclusive easement for vehicular access and airport and taxiway purposes including all necessary and desirable appurtenances along, over, under, across and upon the four (4) tracts of land described by metes and bounds in Exhibit “B” attached hereto …, together with the right and obligation of improving, reconstructing, repairing, and inspecting as grantee may from time to time find necessary and the right to remove or prevent the construction on said tracts of all buildings, structures, or other obstructions which may endanger or interfere with the safety or convenient use of said runway or taxiway. See e.g., 1026/675 (AVDCO to Price); 1002/633, 1002/641; (AVDCO to Hyde-Way, Inc.).
The four tracts of land mentioned above include the north runway-parallel taxiway extension, Kelly Drive, Douglas Drive, and the original south runway-parallel taxiway.
Some earlier deeds did not include the word “obligation.” Despite this omission, ownership of a non-exclusive easement under these circumstances includes a common-law duty to contribute to its maintenance. AVDCO's deed restrictions also require payment of fees to keep the common areas properly maintained. Thus, whether the word “obligation” appears in any given deed, the obligation to contribute to maintenance and operation still exists.
Former POA treasurer Bob Smith litigated this same issue at Ironhead Airport in 2008. Smith v. Huston, 251 S.W.3d 808, 829 (Tex. App.—Fort Worth, 2008, pet. denied) (“Under general easement law, the owner of the dominant estate (here, the lot owners) has a duty to maintain the easement, and the owner of the servient estate (here, the Hustons) has no right to interfere with the rights of the dominant estate to the easement.”)
Hyde included AVDCO's easement in the NE lots he sold until he acquired airport common areas in late 1982. See e.g., 1056/200 (Hyde-Way, Inc. to Terry, T7-7, Dec. 18, 1980). After that he illicitly inserted his restrictions and runway access license in these deeds. (Jay May is now trying to sell his NE T-hangar but cannot do so because Hyde refuses to sign the correction deed unless May indemnifies him of his wrongdoing. Many other NE hangar owners are in the same predicament but do not know it yet.)
Southeast (Hollywood): A nonexclusive easement for an airport runway and taxiway and all necessary or desirable appurtenances for the operation of same along, over, across, under and upon the above-described tract; together with the right of improving, reconstructing, repairing, and inspecting as Grantor herein may from time to time find necessary; the right to remove or prevent the construction on said tract of all buildings, structures, and other constructions which may endanger or interfere with the safety or convenient use of said runway; and the right to assign this easement for the purpose of permitting others to use said tract. Warranty Deed with Vendor’s Lien, Edna Whyte to Gene Varner, 1014/46 at 48. This easement expressly includes the ramp area, buildings (airport office and hangars), and gas pumps on it.
After Edna sold the southeast strip (“Hollywood”) to Gene Varner in 1980, Varner included the language used in the Northeast easements in the deeds he granted to subsequent buyers of hangar lots. These easements include an express maintenance obligation: “together with the right and obligation of improving, reconstructing, repairing, and inspecting as may from time to time be necessary ….” (See e.g., Warranty Deed with Vendor’s Lien, Gene Varner to Odum T. Ollen, 1234/509 at 510; Gene Varner to L&R Flight, 1234/574.
Note: Glen Hyde illicitly inserted his restrictions and runway access license in these deeds.
Southwest (includes SW1, SW2, and 3.784 acres south of SW1 formerly owned by Ted Fischer): The right-of-way and easement Grantors have conveyed to [Grantees] herein shall be for the benefit of and as an easement appurtenant to his respective tract of land … and it is understood by Grantors that [grantees] with his heirs and assigns, for a reasonable runway maintenance fee, shall have uninterrupted use, liberty and easement of passing in, along and over Grantor’s lands and premises together with the use and enjoyment of all airport facilities and runways of Grantors.
West: THAT I, GENE VARNER, Grantor, hereby grant to [HYDE-WAY, INC. and John & Carolyn Brown (Triangle Aviation)] a perpetual easement for the free and uninterrupted use of operating aircraft in, on, over, and across the [runway-parallel taxiway tracts] consistent with airport purposes, including the landing, taking off, taxiing, towing and transporting of aircraft by Grantee, his heirs and assigns, as an appurtenance to [the eight hangar tracts between SW2 and the open T-hangars] as shall be necessary or convenient at all times forever and to defend these rights and privileges in perpetuity. Easement, Gene Varner to Hyde-Way, Inc. and John & Carolyn Brown, 1144/179, May 24, 1982 and 1145/812, June 3, 1982 respectively.
Entire airport: That I, EDNA GARDNER WHYTE, … do hereby give grant and convey to LANDON F. SON… the right to use for vehicular access, including, but not limited to automobiles, trucks, and aircrafts together with the right for use by aircraft for taxiing, taking off, overflying, landing and for other airport purposes including all necessary and desirable appurtenances along, over, under, across and upon the now existing runways and taxiways of Aero Valley Airport … together with the right of access from any property now owned by Grantor or sold by Grantor to Grantee within the confines of the above described Aero valley Airport, across any property now within the confines of Aero-valley Airport, together with the right of improving, reconstructing, repairing and inspecting as Grantee may from time to time find necessary roadways, taxiway, runways, and drainage structures or excavations and the right to remove or prevent the construction on said Aero Valley Airport of all buildings, structures or other obstructions which may endanger or interfere with the safe or convenient use of said runways and taxiways and any areas necessary to assure Grantees access to said runways and taxiways from any area now owned by Grantor or sold by Grantor to Grantee within the confines of said Aero Valley Airport as it now exists. To have and to hold the same perpetually to LANDON F, SON, his heirs and assigns. Easement, Whyte to Landon Son, 1760/35, June 3, 1985.
At the time Whyte granted this easement, she owned nine hangars in NW1, all unsold lots in Aero Valley Estates, and several other lots in the northeast quadrant.
Northwest: See section V below.
A. Easement Holders as Airport Owners
Those property owner/easement holders who have a right to access and use Aero Valley’s runway and other airport facilities can be properly described as the owners of the airport. Texas courts frequently refer to easement holders as owners. Noell v. City of Carrollton, 431 S.W.3d 682, 696-700 (Tex. App.—Dallas 2014, pet. denied). The Dallas Court of Appeals reminded the City of Carrollton that an easement is also a property interest protected by the Texas Constitution. An easement is an insurable property right. Easement holders have a duty to maintain their easements, and the owner of the servient estate (Hyde) has no right to interfere with the dominant estates (hangar owners). Reyna v. Ayco Dev. Corp., 788 S.W.2d 722, 724 (Tex. App.—Austin 1990, writ denied); Smith v. Huston, 251 S.W.3d 808, 829 (Tex. App.—Fort Worth 2008, writ denied).
Edna granted the first runway access and use easement to Bobby Cole and Ted Fischer on November 9, 1977. 862/941. At that time, Edna was in the process of extending the runway to its present length of 3,500 feet and moving the taxiway to the east side. After completing this task, Whyte re-granted the same easement to Cole and Fischer so their respective properties would have a legal right to access the entire runway. 1150/268. Whyte granted an easement for access and use of the runway and all airport facilities to Lee Waldrop’s 1.85 acres on July 9, 1980. 1109/537. In October 1984, Cole platted his property as Southwest Development Phase I (Cab. D, page 270) and Lee Waldrop platted his as Southwest Development Phase II (Cab. D, page 271).
Shortly after Edna acquired the Northeast Addition in 1976, she formed Aero Valley Development Company (“AVDCO”). AVDCO platted the runway-parallel taxiway tracts as easements and began selling lots in the Northeast Addition with runway access and use of all airport facilities provided universally by appurtenant easement. The plat of the runway-parallel taxiway easement is included as Exhibit “C” in a warranty deed from AVDCO to Donald Sitta. 909/650.
An easement “is a nonpossessory interest that authorizes its holder to use the property for only particular purposes.” Marcus Cable Assocs., L.P. v. Krohn, 90 S.W.3d 697, 700 (Tex. 2002) (citing Restatement (Third) of Property (Servitudes) § 1.2 cmt. d). Aero Valley’s easements limit use to airport purposes. All easements granted by Whyte and her AVDCO partners require use “for vehicular access and airport and taxiway purposes.” See e.g., 1002/620. The easements Varner granted to Brown and Hyde for west-side hangar development require use “consistent with airport purposes.” 1145/812 (Brown); 1144/179 (Hyde).
By 1982, Whyte, her partners, and Gene Varner had granted appurtenant easements for access and use of the runway and all airport facilities to every lot then within airport boundaries. These easement holders are properly described as the airport’s owners. After the ACC delegated its authority to the POA, the POA became the governing body authorized to administer the rights and duties of all easement holders.
B. Aero Valley Meets the Requirements to Create a Common-Interest Community
Declarations: Creation of a common-interest community occurs in a declaration. A declaration consists of the recorded documents containing the servitudes that create and govern a common-interest community. Restat 3d of Prop: Servitudes, § 6.2(5) (3rd 2000). Aero Valley’s declarations include AVDCO’s deed restrictions, the amended Northwest Development deed restrictions, each property owner’s deed containing the easements to common property, and the Articles of Incorporation and Bylaws of the Aero Valley Property Owners Association stating that one of the Association’s purposes is to govern and manage the airport for the benefit of all properties within airport boundaries.
Servitudes: At the heart of all common-interest communities are servitudes. Two kinds of servitudes establish Aero Valley as a common-interest community: (1) non-exclusive easements for access and use of common property and (2) deed restrictions that require the airport’s governing body to assess and collect fees to keep common property properly maintained. 1002/363; 1070/529.
Ownership of Common Property: Common property may be owned by community members as tenants in common in a fee-simple estate or as easements. Restat 3d of Prop: Servitudes, § 6.2, cmt b. (3rd 2000). Aero Valley’s property owners share common-property ownership in both forms. All property owners own an easement to access and use the runway, parallel taxiway, and ramp area (either expressly or as an appurtenance). Those on the east side of the runway have a mix of easements and tenancies in common. All east side T-hangar owners own an undivided fee-simple interest in the access area surrounding their row. Thus, these owners are tenants in common with their fellow T-hangar owners. East side T-hangar and box hangar owners own an easement in Kelly Drive and Douglas Drive for vehicle access and airport and taxiway purposes. In contrast, Northwest Development T-hangar owners own easements to cross all other T-hangar tracts in their row and the access areas required to taxi to and from the runway. All roads within airport boundaries are private except Cleveland Gibbs Road and Airway Blvd, both of which are county roads. Property owners have easements to access and use the private roads, which also serve as taxiways.
Only the runway-parallel taxiway and ramp area with buildings are common property to all property owners as easements. Other access areas are common only to those who own easements in them or an undivided fee-simple interest.
C. Common-Interest Community Law Applies Directly to Aero Valley
Common-interest community law applies directly to Aero Valley Airport. A mixed-use community is directly subject to common-interest community law if it meets three requirements: (1) at least part of the community is restricted to residential use, (2) all property owners have a duty to contribute to the maintenance of common property regardless of the amount of use, and (3) common properties are appurtenant to individually owned properties within the community. Restat 3d of Prop: Servitudes § 6.2.
The second element requires further clarification. Landowners who share a common easement are not necessarily part of a common-interest community. The duty to contribute to easement maintenance still exists, but each share could be determined by the frequency and intensity of actual use. Restat 3d of Prop: Servitudes § 4.13 cmt d.; Clearpoint Crossing Prop. Owners Ass’n v. Chambers, 569 S.W.3d 195, 203 (Tex. App.—Houston [1st Dist.] 2018, pet. denied) (frequency and intensity of use can be considered in allocating maintenance costs).
Allocating maintenance costs by proportional use does not apply to any lots within Aero Valley Airport because the terms of the applicable deed restrictions and easements require payment of maintenance fees regardless of use so long as they are allocated on a reasonable basis. The POA bases assessments on square footage. Texas courts consider square footage a reasonable basis. See e.g., Waterford Harbor Master Ass’n v. Landolt, No. 14-13-00817-CV, 2015 Tex. App. LEXIS 622 (Tex. App.—Houston [14th Dist.] Jan. 22, 2015). Hyde agrees, stating that he would go along with the POA’s plan only if it based assessments on square footage. He has since reneged on his agreement. (This is a common theme with Hyde.)
Even if the declarations did not contain the explicit duty to contribute to airport maintenance, that duty would be implied. “Under the rule stated in this section, the power to raise funds reasonably necessary to carry out the functions of a common-interest community will be implied if not expressly granted by the declaration.” Restat 3d of Prop: Servitudes, § 6.5 cmt b. (3rd 2000).
Returning now to the direct application of common-interest community law, Aero Valley Airport meets all three requirements. First, AVDCO restricted the 18 lots of Aero Valley Estates to residential use. Second, AVDCO’s restrictions and terms of the easements require all property owners to contribute to airport maintenance regardless of amount of use. Third, the runway, taxiway, and other airport common areas are burdened by easements appurtenant to all individually owned tracts within airport boundaries. Thus, Aero Valley is directly subject to common-interest community law.
Developers of most common-interest communities record either a single declaration for the entire development or separate declarations for each development stage. Aero Valley Airport did not follow this path because it started out as Edna Whyte’s private flight school and she owned all airport property. When she began the transition to a mixed-use common-interest community, she focused development on the Northeast Addition because she wanted to build her retirement home there and literally have a taxiway to her front door. Development of the hangar tracts she retained from her original 34.0 acres would occur in due time.
These circumstances precluded a single declaration. To fully grasp the benefits and burdens associated with specific airport lots requires construing several instruments together. The POA simplified this process for most property owners by consolidating all AVDCO deed restrictions into one document and recording the results at 2019-136773. This document is also available on the POA’s website.
D. Scope of AVDCO’s Restrictions
Under common-interest community law, when the first lot is sold subject to restrictions, they become effective as to all similarly situated property in the development. § 6.2, cmt d. All individually owned property within Aero Valley Airport is similarly situated because it is intended to support the airport (runway and other airport facilities) and every lot is restricted to accommodate one of three types of airport structures: home/private hangar (Aero Valley Estates) or T-hangars or box hangars everywhere else. Thus, the AVDCO restrictions would automatically apply to all individually owned property no matter where it is located so long as it enjoys an appurtenant easement for runway access and use.
As of today, Texas has not explicitly adopted Restatement rules as such. Texas courts nevertheless quote with approval and routinely rely on these rules. Fortunately, Texas common law would reach the same conclusion even without adopting the Restatement's rules explicitly, but adopting the Restatement rules would produce the most efficient, appropriate, and just resolution in this case. Therefore, at the very least, AVDCO’s restrictions apply to all property Whyte owned. Most lots in the Northeast Addition are explicitly restricted while some are not. The executors of Whyte’s estate explicitly restricted the four rows of open T-hangars on the west side of the runway and all other property acquired from Whyte’s estate on the east side. Whyte conveyed all other properties she owned subject to the AVDCO restrictions.
Under the doctrine of implied reciprocal negative easements, restrictions will apply to well-defined, similarly situated property retained by the original grantor if (1) the grantor intended to adopt a scheme or plan of development that encompassed both the property conveyed and the property retained, (2) the grantor subdivided the property into lots and included in the deeds of the properties conveyed substantially uniform restrictions designed to further the scheme or plan, and (3) the grantees had actual or constructive notice of the restrictions. Evans v. Pollock, 796 S.W.2d 465, 471 (Tex. 1990); Holloway Tr. v. Outpost Estates Civic Club, Inc., 135 S.W.3d 751, 756 (Tex. App.—Houston [1st Dist.] 2004, pet. denied).
All explicitly unrestricted tracts at Aero Valley Airport meet all three elements of the doctrine. First, there is no dispute that Edna had adopted a development plan that encompassed both the property she conveyed and the property she retained. Second, there is also no dispute that all lots within airport boundaries are well defined and similarly situated. Finally, Hyde and Varner had actual notice of the restrictions because they were both grantees and grantors of the same restrictions.
AVDCO’s restrictions contemplate three types of airport structures: residential homes with a single detached private hangar and T-hangars and box hangars of various sizes. Although the restrictions for each structure appear in three separate documents, they are otherwise uniform with regard to the ACC's purpose and duties. All recordings of AVDCO’s amendable restrictions after the ACC's creation require the ACC (now the POA) to “carry out a general plan for the protection, use, and convenience of all property owners.” 2019-136773 at p. 5.
To determine all burdens and benefits associated with a particular lot, three documents must be construed together: (1) the restrictions that created the ACC (this document also contains the restrictions for residential homes), (2) the restrictions for T-hangars and box hangars that also enumerate the ACC’s purpose and powers, and (3) the deed to the lot that contains the easements for access and use of the runway and access areas appurtenant to the lot in question. The second paragraph of the first set of restrictions requires the ACC to serve as the governing body. The T-hangar or box hangar restrictions contain the ACC’s duty to assess and collect fees to keep airport common property properly maintained.
Having to construe three separate documents to determine one’s rights and obligations is less than ideal. In 2019, the POA’s board of directors consolidated without amendment all AVDCO restrictions into one document so property owners could more conveniently determine their rights and obligations.
Whether Aero Valley’s property owners acquired ownership of common property by easement or as tenants in common, they all have the same rights and duties associated with access and use of airport facilities. AVDCO either included the restrictions with the deed or recorded them before conveying the property to which they applied. As AVDCO developed the Northeast Addition, Whyte retained ownership of the entire runway and the remainder of her original 34.0 acres.
As for the property Whyte did not own, the terms of the easements she or her successors granted require the payment of reasonable maintenance fees. See e.g., Waldrop easement for the six lots in Southwest Development Phase 2, 1109/537. As the airport’s governing authority, the POA administers the rights and duties associated with all common property. Thus, the POA has the authority to assess and collect fees from all property owners to keep common property properly maintained.
Like many other developments during that era, AVDCO did not create and record one declaration for the entire airport. Edna’s vision of the airport evolved into something much greater than she may have originally anticipated after she acquired the Northeast Addition. Thus, instead of having a single declaration covering all property within airport boundaries, AVDCO applied deed restrictions appropriate for the planned structure as lots were sold. But when the first lot is sold subject to the restrictions, they become effective as to all similarly situated property in the development. Restat 3d of Prop: Servitudes, § 6.2 (3rd 2000). Therefore, the AVDCO restrictions apply at least to all property Whyte previously owned within airport boundaries.
III. A Developer’s Duties to Create Association and Turn Over Control
When Varner stepped into Whyte’s shoes as a developer in 1980, Whyte had already fulfilled her duty to create an association and turn over control to the property owners. Only one duty remained: the duty to transfer common property to the property owners. Nowhere in Aero Valley’s declarations is the accomplishment of this duty expressly stated. Thus, it must be implied as required under § 6.19.
The developer of a common-interest-community has two primary duties: (1) a duty to create an association to manage common property and enforce the servitudes and (2) a duty to transfer common property to the property owners after the time reasonably necessary to protect the developer’s interests in marketing and completing the project. Restat 3d Prop: Servitudes § 6.19.
Whyte fulfilled the duty to create an association to manage common property and turn over control by creating an ACC that is required to act as a governing body and assess and collect fees to provide for proper maintenance of common areas. The POA arguably stepped into the ACC’s shoes in 1985 when seven property owners incorporated the Aero Valley Property Owners Association. The seven incorporating members and first Board of Directors were Thaine Bandt, Bob Cole, Don Hawkins, Dean Henry, Gary Laughlin, Bill Rucker, and Zena Rucker. Each of these initial directors owned property in various parts of the airport. A copy of the POA’s original Articles of Incorporation and Bylaws and their subsequent amendments is recorded at 2016-135441.
The duty to transfer common property to the property owners is necessary because it prevents or eliminates conflicts of interest that inevitably arise between developers and property owners. The longer the developer retains control, the greater the likelihood of conflict. Accordingly, modern common-interest-community statutes specify timetables within which the developer must turn over control and common property to the members. Id. cmt a.
No truer words could be said about Aero Valley. Hyde assumed Whyte’s role as developer in 1982. Most common-interest community statutes would have required Hyde to turn over the common areas within two years. The Texas Supreme Court, however, has not adopted the Restatement or the Uniform Common-Interest Ownership Act (“UCIOA”). Thus, these secondary sources provide only persuasive rather than binding authority. But so long as the Restatement does not conflict with Texas law, a Texas court would rely on the Restatement to resolve disputes and further the common law in this state just like many other states have done.
When Varner stepped into Whyte’s shoes as a developer in 1980, the duty to transfer common property to the property owners may not have matured quite yet because Whyte still owned several areas available for further development in her original 34.0 acres.
Hyde inherited the same duty to turn over common property when he assumed Varner’s deed and note to these same common properties in 1982. But Hyde had no intention of transferring common property to the property owners. He did not even acknowledge that Whyte had turned over control to the property owners. In his mind, he had turned back the clock to 1976 when Edna Whyte owned the entire airport and had not yet granted the first runway access easement.
A. Facts in Tennessee Case Closely Mirror Aero Valley’s
Aero Valley is not the only community to suffer wrongful developer actions. A Tennessee court of appeals recently dealt with facts strikingly similar to the facts here. Innerimages, Inc. v. Newman, 579 S.W.3d 29 (Tenn. Ct. App. 2019). In this case, Tennessee adopted for the first time the Restatement’s rules governing a developer’s duties to turn over control and transfer common property to the property owners. The Innerimages court noted that at least two courts in other states have cited § 6.19 favorably and could not identify a single case in which a court rejected the Restatement approach. Id. at 46 n.19.
The antagonist in Innerimages v. Newman is Sandra Gunn. She developed a residential community called Shagbark. She then started another development within Shagbark called The Village and recorded separate deed restrictions for it. According to those restrictions, after 75% of the lots in The Village were sold all property owners would automatically become members of The Village Property Owners Association, and the association would exercise the rights and responsibilities formerly exercised by the developer. 579 S.W.3d at 35.
Like Hyde’s Northwest Development, Gunn had grandiose plans to develop The Village in several phases. But over the course of over 24 years Gunn had constructed only four homes, the last of which was built in 2007. Like Gunn, Hyde has not built a hangar in over 25 years. Like Hyde, Gunn had installed conduits and piping for underground utilities but did not supply water or septic systems. To have water, property owners had to rely on a private well drilled by one of the property owners. Each property owner maintains their own septic system. The situation in Hyde’s Northwest Development mirrors Ms. Gunn’s situation in The Village.
Like Hyde, Gunn promised to keep common areas properly maintained but failed to keep her promises. The trial court determined that Gunn commingled maintenance funds, interfered with homeowners’ use of their property, would not and could not fulfill her obligations to the landowners, and never intended to relinquish control to a homeowner’s association. 579 S.W.3d at 38. The court also found that Gunn used Innerimages as a business conduit “to divert assets to the detriment of creditors” and purely as “an instrument for the enrichment of Sandra Gunn.” Id. Hyde fits the same profile.
And just like Hyde, “Homeowners in this case have received nothing except grief and torment by Sandra Gunn . . .. She still talks of proposals …. It is not really an overstatement … that nothing in the way of those things … has been accomplished in 24 years, except the building and sale of four (4) homes. … The Village is at a dead standstill and the poor homeowners are at the mercy of Sandra Gunn.” Id. at 47. Hyde established the same dysfunctional environment at Aero Valley. We began reversing the process in 2016. We just need to finish the job.
B. A Tennessee Court Adopts Restatement Rules and Fixes the Problem
To fix these problems, the court ordered Gunn to create a homeowners’ association that would have “all the rights and responsibilities of the developer” and turn over certain common areas to the association. Id. The creation of a property owners association with all the rights and responsibilities of the developer has already been completed at Aero Valley Airport.
In Innerimages, the heart of the controversy was whether a developer who has failed to establish a homeowners’ association and provides only minimal services may continue to enforce restrictive covenants against residents in a common-interest community. “Although this is an issue of first impression in this state, the Restatement directly speaks to it:
(1) The developer of a common-interest-community project has a duty to create an association to manage the common property and enforce the servitudes unless exempted by statute.
(2) After the time reasonably necessary to protect its interests in completing and marketing the project, the developer has a duty to transfer the common property to the association, or the members, and to turn over control of the association to the members other than the developer. . . .”
Restatement (Third) of Property: Servitudes § 6.19 (emphasis in original). Comment (a) explains the rationale for this provision:
In providing that the developer has an implied duty to create an association, this section reflects widespread development practice and follows modern common-interest-community statutes. 579 S.W.3d at 45-46.
The developer and the purchasers of property in a common-interest community have interests in controlling the common property and the association that may come into conflict. The developer’s primary interest is in completing and selling the project, while that of the purchasers is in maintaining their property values and establishing the quality of life they expected when buying the property. Both the developer and the purchasers have substantial investment interests that are affected by the amount of assessments, the level of maintenance and capital improvements, and the establishment of reserves for future maintenance and replacement of common property. The developer needs to retain control of the association long enough to avoid changes that will jeopardize its ability to sell the remainder, while the purchasers need to stabilize assessments and take charge of the rules governing operation of the community. The longer the developer retains control, the greater the likelihood of conflict. Accordingly, modern common-interest-community statutes specify timetables within which the developer must turn over control to the members.
Comment (b) elaborates:
In determining when control of a project reasonably must be turned over to the members, the percentage of lots or units that have been sold, the interval since the first unit was sold, and the level of the developer’s construction and marketing activities are relevant. The Uniform Common Interest Ownership Act [UCIOA] provides a timetable for turning over of control based on these factors. In the absence of a controlling statute, a court may look for guidance to such a timetable in determining when the developer is required to cede control.
579 S.W.3d at 45-46.
The court noted that, under the UCIOA, the developer of a common-interest community must cede control to a homeowners association (1) 60 days after conveyance of three-fourths of the units that may be created to unit owners other than a declarant; (2) two years after all declarants have ceased to offer units for sale in the ordinary course of business; (3) two years after any right to add new units was last exercised; or (4) the day the declarant, after giving notice in a record to unit owners, records an instrument voluntarily surrendering all rights to control activities of the association. UCIOA § 1-103(d). Id. at 47.
Noting that § 6.19 of the Restatement is relatively new and has only been considered by a few courts, “the principles it articulates are not revolutionary” and it reflects widespread development practice. Id. at 48. “Indeed, one of the primary goals of a developer is to develop real estate and turn over control of that property to a self-regulating community.” Id.
According to the court, “Requiring developers to … turn over control after a reasonable time helps ensure that property owners can actually obtain the ‘form of collective decision making’ that they bargained for when they purchased their property.” Id.
Furthermore, “When the developer’s authority to enforce restrictive covenants is challenged, courts should consider the principles in the Restatement (Third) of Property: Servitudes § 6.19(1)-(2) in determining whether the developer has discharged its duties to the property owners and/or the property owners association.”
The Innerimages court also emphasized that developers owe fiduciary duties to property owners and property owner associations. The court confirmed the trial court’s finding that Gunn was liable for breach of fiduciary duty because the developer “breached her duties under [The Village Restrictions.]” “We interpret the trial court’s ruling as a determination that the developer did not act in good faith in continuing to develop the property and in providing the services promised.” Id. at 50. The court also pierced the corporate veil and held Ms. Gunn personally liable for damages. Id. at 52.
One of the main differences between the facts in Innerimages and here is that none of the Aero Valley declarations requires the developer to turn over common property to the association. Importantly, neither the Propwash nor the Aero Country declarations required the developer to transfer common property to the POA. But they did so anyway without judicial intervention. The Tennessee court nevertheless provides a remedy: “This Court has the authority to adopt provisions of a Restatement in order to further the development of the common law in this state.” Id. at 46. “To the extent that the developer has not discharged its duties under these provisions, courts may exercise their equitable powers to fashion an appropriate remedy.” Id. at 49.
Texas courts have the same authority to fashion an appropriate remedy. The appropriate remedy at Aero Valley is the same as the remedy in Innerimages. If Hyde or any other owner of common property does not voluntarily convey it to the POA, then the court should require it.
C. Whyte Fulfills Her Developer Duties
Ms. Whyte began selling lots and granted the first runway access and use easements in 1977. When she created the first deed restrictions that established airport governance in the elected representatives of the property owners, the transition to a mixed-use common-interest community was nearly complete. 944/478. All that remained was turning over ownership of the airport’s common properties to the property owners’ association.
Completing this last step usually occurs as a matter of course. As noted above, two local private airports serve as examples: Propwash Airport (4775/2251), also in Denton County, and Aero Country Airport in Collin County (3283/649 land records of Collin County as opposed to deed records). Mr. B.I. "Buck" Lock, the developer of Propwash, also conveyed all mineral interests to the POA. 2005-153394. Both developers turned over common properties even though nothing in the declarations required it and judicial intervention was not required.
D. Hyde Ignores His Developer Duties, Chaos Ensues
By 1982, Whyte, AVDCO, and Gene Varner had granted runway access easements to all properties they intended to include within airport boundaries. Hyde did not acquire the Northwest Development property until 1983. After acquiring the primary airport common areas (runway-parallel taxiway-ramp area) in late 1982, Hyde might have had the authority to grant further easements (servitudes) for runway access if he met two conditions. First, additional servitudes could not unreasonably interfere with the enjoyment of the easements already granted. Restat 3d Property: Servitudes § 4.9. Second, Hyde could not effectively amend the original AVDCO declarations such that he would materially change the character of the development and the burdens on existing community members. Restat 3d of Prop: Servitudes, § 6.21.
Hyde and his various entities own both dominant and servient estates. Thus, evaluating the status of the Runway and Taxiway Access addendum requires considering both circumstances. The owner of a dominant estate cannot extend an easement to serve non-dominant estate property. Restat 3d of Prop: Servitudes, § 4.11 (3rd 2000). On the other hand, the owner of the servient estate may be able to add additional servitudes if contemplated by the original parties. Restat 3d of Prop: Servitudes, § 4.9 (3rd 2000) (holder of the servient estate is entitled to make any use of the servient estate that does not unreasonably interfere with enjoyment of the servitude).
If construed as a license, Hyde’s Runway and Taxiway Access addendum violates both conditions. First, it would change the character of the development and fundamentally alter the burdens on existing community members because non-exclusive licenses and non-exclusive easements to use the same common areas are fundamentally incompatible because Hyde's RTL splits property owners into two opposing groups, each paying maintenance fees to a different entity. With non-exclusive easements, the easement holders are responsible for funding the operation and maintenance of the common areas. Under a license, the licensor alone is responsible. This arrangement produces irreconcilable conflicts. It prohibits easement holders from distributing maintenance costs fairly among all those who have a right to access and use common property and creates irreconcilable operational and management conflicts.
Texas law does not allow this incompatible mixture for at least two reasons. First, the owner of the servient estate cannot grant additional servitudes that unreasonably conflict with pre-existing servitudes (non-exclusive easements in this case). As noted above, easements and licenses to access and use the same common areas are like oil and water. They don’t mix because of conflicting rights and duties. Second, the additional burden on the existing easements must have been contemplated by the original parties. Here, Whyte never intended to include Northwest Development lots within airport boundaries because she had to sue Hyde after she discovered his intentions and he would not budge. In that lawsuit, she challenged his right to grant runway access by any means. 1536/176; 1617/927; 2414/215. In this same lawsuit, she also rescinded a quit-claim deed purporting to grant Hyde the right to grant runway access by easement or license.
Finally, the original parties did not contemplate the increased use imposed by an additional 500 aircraft (125 aircraft per phase estimated). Based on an estimate of the maximum number of hangars and the number of aircraft these hangars could accommodate, Whyte contemplated a total of about 350 aircraft to share the airport’s single runway. Including all four phases of the Northwest Development would increase use by 243%. The additional load incurred by the 110 hangars already built in Phases 1 and 2 represents a 140% increase. Two hangars in Phase 2 should soon begin construction, adding another six aircraft or more. A reasonable increase would likely fall in the 20% to 30% range based on the 350 aircraft Whyte had planned.
So, no matter how you look at it, the increased use Hyde planned to impose was patently unreasonable. But to prevent yet more trauma to those who purchased hangars in reliance on Hyde’s representations, the POA’s board of directors approved including Northwest Development Phases 1 and 2 within airport boundaries. But the problem of funding the taxiways and infrastructure Hyde failed to provide still hangs over the heads of Northwest Development hangar owners. Some rows have no taxiway and those that do are in such poor condition that they cannot be used as taxiways at all. Hyde ran water lines but Northwest Development owners have no water unless they provide it themselves.
IV. Easements & Licenses Fundamentally Incompatible
Unreasonable increased use and increased costs, however, do not tell the full story. Texas law prohibits the conflicts Hyde’s license agreement creates. The Restatement also prohibits any attempt to amend original declarations that would materially change the character of the development and the burdens on existing community members. Restat 3d of Prop: Servitudes, § 6.21.
Hyde’s license would materially change the character of the development for several reasons. First, a license offers none of the protections of an easement. A licensee has no ability to protect the use of the land. An easement holder does. Under a license, Hyde could turn the runway into a parking lot and the licensee would have no recourse.
Second, paying a license fee to Hyde rather than an assessment to the POA based on a budget approved by the property owners would materially change the burdens on existing community members because Hyde never had a budget and has stated that he never will. Thus, the license fee was arbitrary. Payment of a license fee to Hyde prohibited fair distribution of maintenance fees among all property owners. Splitting the responsibility between two different entities with vastly different priorities to operate an airport safely and keep it properly maintained does not and will not work.
Finally, Hyde’s claims that his license shields property owners from liability is nonsense. Hyde could not and did not indemnify the hundreds of pre-existing easement holders. Plaintiff’s counsel could easily demonstrate that Hyde’s “license” is really an easement. If such a lawsuit should arise, the court would likely hold the property owners liable for damages caused by Hyde’s failure to operate the airport safely or keep it properly maintained. Although property owner/licensees may have a cause of action against Hyde for fraud, any property owner relying on Hyde’s representations would merely look foolish.
These kinds of conflicts fully explain why the “first in time, first in right” rule exists. It eliminates conflicting claims to the same property. “The superiority of different claims on the same property is determined according to the order in time that the competing claims are created.” Conoco, Inc. v. Amarillo Nat’l Bank, 950 S.W.2d 790, 796 (Tex. App.—Amarillo 1997, pet. denied); World Help v. Leisure Lifestyles, 977 S.W.2d 662, 669 (Tex. App.—Fort Worth 1998, pet. denied). All runway access easements preceded Hyde’s license. Thus, Hyde’s license, if it is a license, is void. To protect their hangar investments, property owners must construe the document as an easement.
Public Access Airport Property? In 1992, Hyde conveyed airport common property and several of his own vacant lots to Texas Air Classics, Inc. (“TAC”), a non-profit corporation organized under 26 U.S.C.A. § 503(c). Hyde formed TAC for several reasons, not least of which was to reduce property tax appraisal rates on his property for his own personal benefit. TAC lost its non-profit status in 2013, but Hyde failed to wind down the non-profit’s business or dispose of its assets as required by law. On the same day that the non-profit terminated, Hyde formed a for-profit corporation with the same name.
TAC granted Hyde-Way, Inc. a deed of trust to secure the note on the property but TAC never made payments under its terms. During the POA’s previous litigation against Hyde, Patrick Schurr, a lawyer from the Scheef & Stone law firm in Frisco, executed a substitute trustee’s deed claiming to foreclose on the property. The deed states:
"Notices stating the time, place, and terms of sale of the Property were posted and filed, as required by § 51. 002 of the Texas Property Code, and other requirements of that statute have been met. As required by that statute and by the Deed of Trust, Substitute Trustee sold the Property to Buyer, who was the highest bidder at the public auction, for the amount of the sale. The sale began at the time specified above and was concluded by 1 :00 p.m. of the same day. a public sale held at the Denton County courthouse."
2017-26535. There is no evidence in the public record that notice was given or that any such public sale ever occurred.
Finally, Hyde restricted several vacant lots and other undeveloped properties as public access airport property. These properties have never been used and cannot be used for public access airport property in their present state. Hyde has nevertheless enjoyed a vastly reduced tax appraisal rate on these properties for nearly 30 years.
In addition to claiming the airport "public access," Hyde also restricted the name of the airport to Northwest Regional, granted himself the authority to unilaterally allow or prevent anyone or any number of persons runway access rights, and several other restrictions. 3415/321; 3415/338. Because these tracts were already restricted under the AVDCO restrictions, Hyde would have to amend them to change them. Property owners generally had no notice of these restrictions because they appear only in Hyde entity deeds. Hyde made no attempt to amend the AVDCO restrictions. Thus, these restrictions are void.
V. Hyde’s Easements in the Northwest Development
Hyde has granted so many runway access easements to Northwest Development lots that claiming his Runway and Taxiway Access addendum is a license is absurd. Hyde created the Runway and Taxiway Access license agreement as an addendum to the deed restrictions he imposed on the Northwest Development in 1983. In 1987, Hyde lost all unsold Northwest Development lots and other airport properties he owned to First Interstate Bank (“Bank”). The Bank had perfected a $1.68 million judgment against Hyde because of Hyde's fraudulent conveyance of airport common areas to a Nevada corporation owned by Hyde. The Bank’s settlement agreement required Hyde to convey easements for runway access and use to all unsold lots and to any lots Hyde-Way, Inc. or Hyde personally would ever acquire in the future. In July 1983, Hyde conveyed easements for runway access and use to Lewisville National Bank when the bank acquired eight hangars in Row 4 of Northwest Development Phase 1 (“NW1”). The grant includes non-exclusive easements over all the “A” lots in front of them. (Hangar Lots 4-1, -3, -4, -5, -7, -9, -15, -16, -18, -20; “A” lots 1A, 3A, 5A, 7A, 9A, 11A, 13A, and 15A; 2A, 4A. 6A, 8A, 10A, 12A, 14A, 16A, 18A, and 20A).
The settlement agreement applied to Hyde personally and to Hyde-Way, Inc. Hyde attempted to defeat the settlement agreement by creating other entities to buy and sell hangars. These additional Hyde entities include Dreamships, Flight Data, and Rotor-Dyne. They are obviously Hyde's alter egos. Under these circumstances, a Texas court would pierce the corporate veil just as easily as the Tennessee court did in Innerimages, Inc. v. Newman. Thus, any hangars Hyde acquired under any of these entities would receive runway access easements just as if they were acquired by Hyde-Way, Inc. (all NW lots already had runway access easements under Hyde's original restrictions because this document includes all NW lots. See Volume 1208, page 944 corrected at Volume 1889, page 9).
In November 1983, Hyde-Way, Inc. conveyed nine more hangars out of NW1 to Edna Whyte as partial payment for what he still owed her for common property (i.e., the runway-parallel taxiway tracts) and other airport tracts after defaulting on payments (1-1; 2-5; 3-6, -8, -14; 4-6, -8, -14; and 8-1). (HW to Whyte 1297/151, Nov. 22, 1983). Because the value of these hangars turned on whether they had runway access, Whyte had to agree to runway access, otherwise she would have lost even more due to Hyde’s default. Thus, Hyde effectively prevented her from proceeding with the lawsuit, leaving the adjudication of Hyde’s license for another day.
Hyde began conveying the same hangar to two different parties immediately after he acquired airport common property. In December 1983, Hyde sold NW1 hangar tract 2-5 to Dan and Ann Thomas, which is the same tract he conveyed to Whyte less than two months before. (HW to Thomas 1315/157, Dec. 29, 1983). Ann did not discover that she and Dan had received a voidable deed until after Dan died and she tried to sell the hangar. Because Whyte was the defrauded party, Whyte or the executors of her estate could have declared the Thomas deed void. But because the executors of Whyte's estate did not account for this hangar, they did not challenge the Hyde to Thomas deed. That deed is now considered valid.
Whyte was nevertheless still the legal title holder. Therefore, this lot and her other eight NW1 hangars acquired a runway access and use easement in an easement deed dated November 8, 1985 to Landon Son. In that easement deed, Whyte granted appurtenant easements for runway access and use to these nine hangars and to all other airport property she still owned. See Volume 1760, page 35. Keep in mind, though, that all NW lots already had runway access easements via Hyde's first restrictions. He just called it a license. Finally, all properties outside the Northwest Development on which Hyde attempted to impose his license addendum already enjoyed appurtenant easements for runway access and use.
Both as a practical matter and as a matter of law, Hyde’s license is a license in name only. A license is revocable at will and non-transferable. An instrument that is irrevocable for 99 years and renewable for another 99 years like Hyde’s is not a license. A written instrument that is transferable to subsequent owners and grants the right of ingress and egress at any time like Hyde’s is not a license. These are characteristics of an easement or possibly a covenant running with the land. Hyde’s Runway and Taxiway Access addendum is best construed as an easement.
Other than the obvious fact that Hyde’s “license” has been an abject failure as a matter of undisputed history, there are more adverse consequences of construing it as a license. A license can be revoked at any time at the whim of the licensor. If the licensor sells the land subject to the license, the license terminates. If the licensor wants to use the land contrary to the terms of the license, too bad. The license terminates. Under a license, nothing would prevent Hyde from selling the runway to a buyer who turns it into a self-storage facility. A licensee has no recourse other than potentially nominal monetary damages. Who would invest hundreds of thousands of dollars in an airplane hangar under these circumstances?
Only one conclusion follows: Hyde’s license scheme is a sham that resulted in a one-way trip to self-destruction. Recognizing that our airport is a common-interest community and Hyde’s NW addendum is an easement eliminates all property-related issues. Applying these rules allows the POA to administer consistent rights and duties among all airport property owners.
[1] Buffington, H. Glenn. "Edna Gardner Whyte". The Vintage Airplane. October 1973, pp. 12–14, 16.
[2] 888/301
[3] The two runway-parallel taxiway tracts are 2,247 feet by 195 feet (original) and 1,273 feet by 195 feet (extended) for a total length of 3,520 feet.
[4] 922/478, refiled to include Exhibit “A” at 1015/136.
[5] E.g., 1056/707 (Everett); 983/195 (O’Brien); 940/660 (Whyte).
[6] See e.g., 4377/1481 at 1487.
[7] 909/585; 909/587.
[8] 909/585.
[9] 909/651 at 654-655.
[10] Id.
[11] 922/478; 1002/363; 1025/830 (re-recorded at 1070/529, 1112/465, and 1142/467); 3083/1.
[12] 922/478, ¶ 2.
[13] See e.g., Noell v. City of Carrollton, 431 S.W.3d 682, 705 (Tex. App.—Dallas 2014, pet. denied). Instead of an ACC, the Air Park Dallas restrictions provide for a five-member “Zoning Committee” to be elected by a majority of the lot owners.
[1] 888/301
[2] 922/478, refiled to include Exhibit “A” at 1015/136.
[3] E.g., 1056/707 (Everett); 983/195 (O’Brien); 940/660 (Whyte).
[4] See e.g., 4377/1481 at 1487.
[5] Id.
[6] 909/585; 909/587.
[7] 909/585.
[8] 909/651 at 654-655.
[9] 922/478; 1002/363; 1025/830 (re-recorded at 1070/529, 1112/465, and 1142/467); 3083/1.
[10] 922/478, ¶ 2.
[11] See e.g., Noell v. City of Carrollton, 431 S.W.3d 682, 705 (Tex. App.—Dallas 2014, pet. denied). Instead of an ACC, the Air Park Dallas restrictions provide for a five-member “Zoning Committee” to be elected by a majority of the lot owners.
[12] 1002/363; 1025/830, etc.
[13] In 2019, the POA consolidated without amendment all AVDCO restrictions into one document to greatly simplify the need to read at least three separate documents together to determine the burdens and benefits associated with each lot.
[14] The ramp area buildings were and remain the only buildings in existence located on a servient-estate tract.
[15] See e.g., 4377/1481; 1018/501.
[16] 4775/2251 (Lock); Collin County 3283/649 (Hurst) (recorded in land records as opposed to deed records).
[17] 2005-153394.
[18] 726/406.
[19] 1109/537 at 538.
[20] 862/938; 862/941.
[21] Whyte had borrowed money from Fischer in 1975 for airport development. Fischer retired Whyte’s debt as consideration for the runway access easement.
[22] 1109/537.
[23] 1150/268.
[24] 1002/633.
[25] Hyde’s deed and deed restrictions were recorded on the same day, restrictions first then the deed. 1002/363 and 1002/633 on February 22, 1980.
[26] The 34.0 acres consisted of two tracts: 24.216 and 9.784 acres respectively.
[27] 1014/46.
[28] Id.
[29] 570/175.
[30] 1174/626.
[31] 862/941 ($20,000 from Ted Fischer); 323/262 ($33,500 for 24.216 acres); 289/320 ($25,000 for 9.784 acres); 430/795 ($85,000 for 47.5 acres).
[32] 1144/179 (Hyde); 1145/812 (Brown).
[33] Id.
[34] 1174/615; 570/175.
[35] 1174/251; 1174/619
[36] Cab D, pp. 270 and 271 respectively, Plat Records, Denton County, Texas.
[37] 2342/908
[38] Cab D, p. 271, amended May 17, 2013.