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NPOAN was not authorized to exercise architectural control authority in section eight of the subdivision at the time Anderson constructed her driveway, and it did not show the construction was otherwise contrary to an action of an architectural control committee acting with authority in Section Eight. Therefore, NPOAN’s rejection of Anderson’s plans and its suit to remove the driveway represent an arbitrary and capricious act. Click here for the full text of this decision FACTS:The Diamondhead Corp., now known as Purcell Co. Inc., filed deed restrictions on the Newport Subdivision in Crosby in 1979. The 1,900-home subdivision is divided into 14 sections, one of which is called “Section Eight.” The homeowners in Section Eight created the Section Eight Owners’ Association, giving it power to collect dues and to establish the Architectural Approval Control Committee. The AACC was given authority over various homeowner plans, including driveways. In 2001, the Section Eight Owners’ Association recorded amendments to the original deed restrictions in the county property records. The amendment gave authority to enforce deed restrictions to the New Property Owners’ Association of Newport (NPOAN), an organization created by homeowners in 1996. Meanwhile, in 1997, the successors to Diamondhead, Newport Partners, declared bankruptcy. NPOAN was a creditor of the company. It received payment in part from the court-ordered sale of the remaining undeveloped property in the neighborhood to Rampart Properties Corp, which purchased the property and all the rights to it. In 1999, Rampart and NPOAN entered into an agreement where Rampart assigned to NPOAN certain rights to the property. Mary Lee Anderson first sought to build a U-shaped driveway in her Section Eight home in 1990, but despite approval by the AACC, she did not build it. In 2000, she submitted another plan, this time to CIA Services, a managing company hired by NPOAN. NPOAN said it denied the request, but Anderson claims she never heard back from the group and, under the terms of the NPOAN’s regulations, assumed that no response meant approval. She began construction on the driveway. NPOAN’s attorney demanded she stop construction. She resubmitted her application to the AACC, and it was denied without stating a reason. Anderson went on with her construction. After initial proceedings related to injunctions and restraining orders, NPOAN filed suit as a Texas nonprofit corporation composed of persons who reside and own homes in the Newport Subdivision. Anderson entered a verified denial challenging NPOAN’s standing and capacity. At the bench trial, Anderson was ordered to remove the driveway and restore the property. The trial court also awarded NPOAN attorneys’ fees. HOLDING:Reversed and rendered. The court addresses Anderson’s standing and capacity to sue issues first. The court says an organization has standing to sue when 1. the members otherwise have standing to sue in their own right; 2. the interests the organization seeks to protect are germane to the organization’s purpose; and 3. neither the claim asserted nor the relief requested requires the participation of individual members. The court rules that NPOAN, as a homeowners’ association enforcing the deeds applicable to all members, has standing to sue. NPOAN also has capacity to sue, the court rules. The Section Eight declarations giving NPOAN the capacity to sue had not been finalized at the time of the suit, and the assignment from Rampart did not include the right to sue in its own right to enforce deed restrictions. However, Property Code �202.004(b) confers on NPOAN the capacity to enforce deed restrictions in a subdivision, not through anything authority Section Eight invested in the organization (which came after the suit), but because the property owners could designate NPOAN as a representative association under �202.004(b). Turning to the merits of the case, the court finds NPOAN exercised control reserved for the AACC when it turned down Anderson’s driveway plans in 2000. Again, NPOAN had not itself received such authority through assignment from Rampart. Though Property Code �204.011(b) allows for architectural control to vest in the property owners’ association, it does not do so when, as here, the AACC was still a viable, functioning body. Therefore, NPOAN had no right to approve or reject any improvements proposed by Section Eight property owners. The court also holds that Anderson has not violated a deed restriction. Nor can she be ordered to remove the driveway. “The record does not show Anderson constructed the driveway contrary to the decision of a valid, active architectural control committee authorized to act in Section Eight. Therefore, we cannot say she violated a deed restriction in this manner.” The court reverses the trial court’s award for attorneys’ fees for NPOAN and remands for a hearing on attorneys’ fees for Anderson. OPINION:Carter, J.; Morriss, C.J., Ross and Carter, JJ.

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