                                 IN THE
                         TENTH COURT OF APPEALS

                                No. 10-08-00073-CV

BRET "DOC" BERKMAN,
                                                           Appellant
v.

CITY OF KEENE,
                                                           Appellee


                          From the 249th District Court
                             Johnson County, Texas
                           Trial Court No. C200600426


                         DISSENTING OPINION


      The Court errs. The trial court did not. The contract at issue in this proceeding

does not create a covenant running with the land.

      Because the entire case is about a relatively short contract, and because the

majority does not, I will provide the reader with the full text of the contract. It is as

follows:

      THE STATE OF TEXAS          )(
                                       KNOW ALL MEN BY THESE PRESENTS:
      COUNTY OF JOHNSON           )(
       WHEREAS, LASZLO VARGA and wife, AMINE VARGA, are the owners of
       a certain 31.8 acre tract as described in Volume 637, page 430, Johnson
       County Deed Records; and

       WHEREAS, the property is currently being used as a home for children who
       are wards of the State of Texas, and is doing business under the name
       Odyssey Harbor; and

       WHEREAS, LASZLO VARGO and wife, AMINE VARGA, are
       contemporaneously with the execution of this agreement, executing a
       warranty deed, a true and correct copy of which is attached hereto as Exhibit
       “A”, for a recited consideration of $10.00 and other good and valuable
       consideration; and

       WHEREAS, it is the intent of this agreement to set out the consideration for
       the execution of the deed shown as Exhibit “A” hereto.

       THEREFORE, KNOW ALL MEN BY THESE PRESENTS: That we, LASZLO
       VARGA and wife, AMINE VARGA (hereinafter VARGAS) and the City of
       Keene, Texas, a Municipal Corporation, (hereinafter CITY) do make the
       following agreement:

       (1)    CITY agrees to furnish metered water from the City Water System to
       the 31.8 acre tract through two water taps and meters in an amount not to
       exceed 100,000 gallons per month, or 1,200,000 gallons per year, cumulative.
       The monthly amount may be exceeded, so long as the yearly maximum
       amount is not exceeded. No charge shall be made for water which does not
       exceed the yearly maximum. Rates for water usage over and above the
       yearly maximum shall be based on the City’s then current water rates, with
       the yearly maximum to be equal to zero (0) gallons on the City’s rates.

       Should the VARGAS not use their yearly maximum in any one year, the
       amount not so used may not be accumulated and used during any
       succeeding year. The first twelve (12) month period for determining the
       amount of water usage shall begin on January 1, 1986 and end on December
       31, 1986.

       Sewer service shall be furnished to the VARGAS by the CITY through
       existing sewer lines on the same basis. The CITY shall not be obligated to
       construct any additional sewer lines nor will the CITY be required to
       construct sewer service to any building now located or to be located on the
       real property. However, the CITY does agree that any sewer service
       furnished to any buildings on said tract shall be furnished at no charge to the
       VARGAS and through existing sewer lines up to 1,200,000 gallons of water
       usage as measured by the above mentioned water meters.

Berkman v. City of Keene                                                                 Page 2
       (2)     If the property is used on a continuous basis from the date of this
       agreement forward as a home for children who are wards of the State of
       Texas then the CITY shall furnish said water and sewer service as heretofore
       set forth for a period of thirty-five (35) years. In the event that the property
       ceases to be used as a home for children who are wards of the State of Texas
       then the term of this agreement shall be for a period of twenty (20) years.

       (3)     The VARGAS agree to petition CITY for annexation of the said 31.8
       acre tract within two (2) years from the date of this contract.

       (4)    The VARGAS have the right to transfer and assign to any party any
       rights that they may have under the terms of this agreement and such
       assignee shall have all the rights, privileges, and duties hereunder.

       (5)    This agreement shall be construed under and in accordance with the
       laws of the State of Texas and all obligations of the parties created hereunder
       are performable in Johnson County, Texas.

       (6)    This agreement shall be binding upon and inure to the benefit of the
       parties hereto and their respective heirs, executors, administrators, legal
       representatives, successors and assigns where permitted by this agreement.

       (7)     In case any one or more of the provisions contained in this agreement
       shall for any reason be held to be invalid, illegal, or unenforceable in any
       respect, such invalidity, illegality, or unenforceability shall not affect any
       other provision thereof and this agreement shall be construed as if such
       invalid, illegal, or unenforceable provision had never been contained herein.

       (8)    Both parties agree that upon the execution of this agreement and the
       deed attached as Exhibit “A”, the lease agreement covering the 31.8 acre tract
       shall be terminated and of no further force and effect.

       (9)   This agreement constitutes the sole and only agreement of the parties
       hereto and supersedes any prior understandings or written or oral
       agreements between the parties respecting the within subject matter.

       WITNESS our hands, this 11th day of April, 1986.

       When the contract is read in its entirety and non-material provisions are not

given undue weight, the following is made clear by the express terms of the contract:

        1. This contract is part of the consideration, the purchase price, paid by the
           City for the real property conveyed by the Vargas to the City in an

Berkman v. City of Keene                                                                  Page 3
            entirely separate document (thus, it is like a note for future payment of
            water and services rather than money);

        2. The City agreed to pay in the form of future delivery of water and sewer
           services of 1,200,000 gallons per year for a determined period;

        3. The period was determined by reference to the use being made of a
           particular tract of land;

        4. While delivery of the water and sewage service was discussed in
           reference to the property, it was not exclusively limited to that property;

        5. Without reference to the real property, the rights of the Vargas under the
           contract could be assigned; and

        6. The rights under the contract pass to the parties’ successors and assigns.

       Further, it is undisputed that the Vargas never assigned their rights under this

contract to anyone.

       It is paragraph 4 of the contract that is particularly fatal for Berkman’s claim.

Under that provision, the Vargas clearly had the right to assign the right to receive

water and sewer services, subject to the limit on amounts thereof, to a third party.

Thus, this contract for payment did not, and was never intended to, create a covenant

running with the land that Berkman purchased.

       It is this ability to assign the right to receive water and sewer service at a location

other than the property that destroys any suggestion that the agreement touched or

concerned the land owned by Berkman. For sure, when the contract was made, the

parties anticipated delivery of water and sewer services would be to the property and

designated that location in the agreement.        But just because that was the initially




Berkman v. City of Keene                                                                Page 4
designated delivery location and service point did not mean that the delivery location

and service point could not change. In fact, that is what paragraph 4 allowed.

       The contract to be paid in a specified volume of water and sewer services was a

part of the price the City agreed to pay for the property. It would not, should not, and

according to the contract, did not matter to them to where it was delivered.

       Because Berkman did not show he was an assignee of the right to receive the

water and sewer services, and because such contractual rights did not touch or concern

land such as to be a covenant running with the land, I would affirm the trial court’s

judgment. Because the Court does not, I respectfully dissent.



                                         TOM GRAY
                                         Chief Justice

Dissenting opinion delivered and filed July 15, 2009.




Berkman v. City of Keene                                                          Page 5
