The Texas Supreme Court denied a petition for review in *Gardens of Connemara Ltd. v. Longhorn Creek Ltd.* (Tex. 2025), leaving unresolved a critical question about when trial courts must consider exhibits attached to pleadings when ruling on Rule 91a motions to dismiss. Justice Young issued a concurrence explaining the denial and highlighting the importance of the underlying legal issue.
The case arose from a declaratory judgment action filed by Longhorn Creek Ltd. against Gardens of Connemara Ltd. and Emerson Farm Company Ltd., seeking to avoid a private transfer fee. Private transfer fees, defined under Texas Property Code Section 5.201(4) as amounts payable upon the transfer of real property interests, have become increasingly controversial in real estate transactions.
The dispute centers on a 2005 agreement in which Connemara allegedly burdened hundreds of acres of land with a perpetual obligation requiring subsequent purchasers to pay "a fee equal to 1% of the Value of the Conveyed Land" to Connemara. Under this arrangement, a $100,000 house would generate $1,000 for Connemara every time the property sold, regardless of how frequently transactions occurred.
Justice Young described these private transfer fees as resembling "the toll demanded by the troll under the bridge in children's fairy tales," while acknowledging that the underlying theory is more benign. Real estate developers argue that private transfer fees provide an opportunity to spread development costs over time through future resale proceeds.
The central legal question in the case involves Rule 91a of the Texas Rules of Civil Procedure, which governs motions to dismiss. Specifically, the court must determine when trial courts are required to consider exhibits appended to petitions when ruling on such motions. This determination depends on whether the pleading exhibits constitute "in whole or in part, the claim sued on."
Justice Young emphasized the importance of resolving this procedural question, noting that "Texas courts should carefully analyze these questions, and this Court will likely need to resolve them in a future case—but not this one." The justice expressed "some doubts about how the court of appeals resolved" the Rule 91a issue while explaining why other complications in the case warranted denying the petition for review.
The Court of Appeals for the Fifth District of Texas had previously ruled on the case, but Justice Young's concurrence suggests the Supreme Court may have concerns about that court's analysis of the Rule 91a standards. However, the presence of other complex issues in the case made it unsuitable for Supreme Court review at this time.
The denial leaves Texas trial courts without clear guidance on a procedural question that frequently arises in civil litigation. Rule 91a motions to dismiss are commonly used tools for defendants seeking early dismissal of cases based on the legal sufficiency of the plaintiff's claims. The question of when courts must consider attached exhibits could significantly impact how these motions are evaluated.
Private transfer fees have become increasingly controversial in Texas real estate law. While developers argue they provide legitimate financing mechanisms for development projects, critics contend they create unfair burdens on property owners and interfere with the free transfer of real estate. The fees can accumulate substantial amounts over time, particularly on valuable properties that change hands frequently.
The Texas Legislature has shown interest in regulating private transfer fees, with various proposals addressing their use and enforceability. Property owners and real estate professionals have raised concerns about the perpetual nature of many such fees and their potential impact on property values and marketability.
Justice Young's concurrence signals that while the Supreme Court of Texas recognizes the importance of clarifying Rule 91a standards, the court prefers to address the issue in a case with fewer complicating factors. This approach reflects the court's strategic case selection, choosing vehicles that allow for clear precedential rulings without unnecessary complications.
The denial also means that lower courts will continue to grapple with the pleading exhibit question on a case-by-case basis until the Supreme Court finds an appropriate case for review. Legal practitioners handling Rule 91a motions must navigate the uncertainty about when attached exhibits will be considered part of the analysis.
For the parties involved, Longhorn Creek's declaratory judgment action will proceed in the lower courts under the existing appellate ruling. The company's effort to avoid the private transfer fee obligation will continue without the benefit of Supreme Court clarification on the procedural standards governing its case.
The case highlights the intersection of substantive property law issues and procedural rules that govern how courts evaluate legal claims. As Justice Young noted, the Supreme Court will likely need to address these Rule 91a questions in a future case that presents the issues more clearly for appellate review.