## Facts

- Thomas Trotter developed Thurman Bend Estates, a 27-lot residential subdivision on the south shore of Lake Travis.
- Trotter and his real estate company represented orally and in written sales materials that subdivision owners would have use of a one-acre lakefront park for activities such as picnicking, swimming, sunbathing, fishing, and launching watercraft.
- The subdivision declaration of covenants, conditions, and restrictions provided that the developer would convey to the owners’ association a “lake side park area easement and an access easement” for use by all owners, located on Lot 18.
- In 1996, Robert L. Haug purchased Lot 18, knowing the one-acre community park had been represented as located on that lot.
- Haug’s earnest-money contract reserved for the owners’ association a “1 acre recreational easement (Dimensions 100' x 400')” along the east boundary of Lot 18, to be recorded in a separate instrument after the plat was approved and recorded.
- Before closing, Haug asked that language be changed from “lake side park easement” to “boat launch easement.” Trotter’s attorney testified he understood the wording change as not changing the developer’s intent to provide a one-acre recreational park easement.
- A separate “Grant of Easements” was later executed and recorded. It created (1) a right-of-way easement limited to ingress and egress across Lot 18 and (2) a “Boat Launch Easement” with a metes-and-bounds description totaling roughly 10,900 square feet—far less than one acre.
- The grant’s easement description resulted from drafting and surveying problems; the surveyors preparing the description did not review Haug’s purchase contract.
- Relying on the recorded grant, Haug informed other owners that the easement allowed only immediate loading and unloading of watercraft and did not allow park or picnic use, and he asserted limits on activities such as parking, fishing, picnicking, swimming, and loitering.
- Subdivision owners and the owners’ association sued Haug seeking reformation of the grant to match the intended one-acre lakeside park easement. Haug sought declaratory relief enforcing the grant as written and requested attorney’s fees.
- After a bench trial, the trial court found the grant did not state the developer’s full intent and contained a mistaken legal description. The court reformed the instrument to reflect a one-acre “Lake Side Park Area Easement” allowing recreational uses, and it awarded attorney’s fees to the plaintiffs and the association.
- Haug appealed, challenging the reformation, the trial court’s findings, and the attorney’s-fees award.

## Issues

1. Whether the evidence was legally and factually sufficient to support reformation of the Grant of Easements based on mutual mistake, or alternatively based on unilateral mistake by the grantor coupled with the grantee’s knowledge and inequitable conduct.
2. Whether the trial court properly reformed the easement to reflect a one-acre lakeside park (rather than a limited boat-launch area) consistent with the parties’ agreement and the subdivision documents.
3. Whether the trial court properly denied Haug’s requested declaratory relief and properly awarded attorney’s fees to the plaintiffs and the owners’ association.

## Decision

- The court of appeals affirmed the judgment.
- The record supported the trial court’s findings that the developer intended to create a one-acre recreational lakeside park easement on Lot 18 for all subdivision owners, and that the recorded grant failed to reflect that intent due to mistake.
- The court upheld reformation of the instrument, including correction of the easement’s label and legal description and confirmation that the easement allowed recreational park uses associated with lake access.
- The court also affirmed denial of Haug’s request to enforce the grant as written through declaratory relief.
- The attorney’s-fees award to the plaintiffs and the owners’ association was affirmed.

## Legal Principles

- A court may reform a written instrument when, because of mutual mistake, or unilateral mistake combined with the other party’s knowledge and fraud or inequitable conduct, the instrument does not express the parties’ actual agreement.
- The party seeking reformation must prove (by clear and convincing evidence) both the prior agreement and that the written instrument, as executed, failed to reflect it because of the relevant mistake.
- In determining the parties’ intent, courts may consider contemporaneous documents and objective evidence, including subdivision declarations and restrictions, marketing materials, and the parties’ contract terms.
- In a bench trial, appellate courts review legal and factual sufficiency challenges with deference to the trial court’s credibility choices and resolution of conflicts in the evidence.
- Attorney’s-fees awards tied to the claims litigated are reviewed for support in the record and for abuse of discretion.

## Conclusion

Haug v. Carter affirmed equitable reformation of a recorded easement grant on a Lake Travis subdivision lot when clear and convincing evidence showed the parties intended a one-acre lakeside park easement for homeowners, but the recorded instrument mistakenly described only a smaller, limited boat-launch easement and a right-of-way; the court also affirmed denial of Haug’s declaratory request and upheld the trial court’s attorney’s-fees award.


Haug v. Carter, 2004 WL 1685619 (2004)