686 S.W.3d 418
Tex. App.2024Background
- Longhorn Creek Ltd. sought declaratory relief against Gardens of Connemara Ltd. and Emerson Farm Company, Ltd., regarding a “private transfer fee” imposed by a Conservation Easement Assessment Agreement filed in Collin County, Texas.
- The agreement required a 1% fee on all land transfers covered by the agreement, allegedly lasting in perpetuity.
- Longhorn Creek claimed it was not required to pay the fee due to alleged non-compliance with statutory notice requirements, subsequent amendments, and certain legal doctrines.
- Connemara and Emerson filed a Rule 91a motion to dismiss, arguing Longhorn Creek’s claims had no basis in law or fact; the trial court granted the motion and awarded attorney’s fees to Connemara and Emerson.
- On appeal, Longhorn Creek argued its amended petition sufficiently pleaded a justiciable controversy and factual basis to proceed under the Declaratory Judgments Act.
- The Dallas Court of Appeals reversed the trial court, holding Longhorn Creek’s claims had a legal and factual basis, and vacated the award of attorney’s fees.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Sufficiency of Pleading under Rule 91a | Sufficient facts and legal basis for declaratory relief; fair notice provided | No basis in law/fact; pleadings and exhibits show compliance and no claim | Plaintiff’s pleadings adequate; Rule 91a dismissal improper |
| Compliance with Texas Property Code § 5.203 | Notices failed strict statutory requirements (typeface, property description) | Notices complied by referencing public records; compliance is sufficient | Did not find clear legal bar from pleadings; claim not foreclosed |
| Waiver of Private Transfer Fee | Amendments and releases show waiver of enforcement as to Longhorn Creek | Releases to others do not waive rights against Longhorn Creek | Determination of waiver is fact-intensive; not legally impossible |
| Preemption of Common Law by Statute | Common law principles apply to validity of the fee covenant | Statutory scheme supersedes/takes precedence over common law issues | No direct conflict; claims are not preempted as a matter of law |
Key Cases Cited
- In re Farmers Tex. Cnty. Mut. Ins. Co., 621 S.W.3d 261 (Tex. 2021) (standard for reviewing summary dismissal under Rule 91a)
- Cash Am. Int’l Inc. v. Bennett, 35 S.W.3d 12 (Tex. 2000) (statutory preemption of common law is disfavored)
- Inwood N. Homeowners’ Ass’n, Inc. v. Harris, 736 S.W.2d 632 (Tex. 1987) (requirements for a covenant to run with the land)